TIPS FOR BUYING
NEW CONSTRUCTION

IN MARIN & SF

Purchasing New Construction development often follows a distinctly different process for the Buyer than traditional re-sale residential sales. I’d like to share from my experience, the ways in which you can prepare for a successful new construction purchase. Not only does it differ in costs, paperwork, timing - it also may involve different lingo and terminology. This is particularly relevant, NOW, as we are in a transitioning market - this next 30 / 60 / 90 days is a fantastic time to gain some leverage on new construction developers.

Here is a short list covering a few cost/ process variances:

• the Buyer typically pays transfer tax

• the Purchase contract is from developer’s legal team

• Earnest money Deposit is typically 5% of purchase price

• Credits/ Upgrades are negotiable: think appliances/ flooring type/ backsplash/ closet organizers/ window treatments, etc.

• Title/ Escrow company is elected by developer

• Preferred/ Approved lenders may be required for loans

• Length of escrow may vary

• Move-in dates may depend on project receiving a certificate of occupancy, or completion of the interior of your specific unit

• a Fit and Finish warranty may exist for 1-year

• Finishes, appliances and/ or after-market add-ons may not always be available through the developer window treatments/ kitchen islands/ shower enclosures

Here are a few of the reasons why now is presenting itself as an opportune time to purchase new construction:

Sales are “first-come first-served”, meaning that there is commonly less competition
Developers are heavily invested in their development, and eager to sell during economic slowdowns
Many more units are available than are typically listed in the MLS, therefore, you may be able to choose a floor plan or location in the building that you prefer
Developers may offer credit to buyers at close of escrow during transitional markets (such as now with rising interest rates). Each lender may offer different incentives as well.
I’ve negotiated credit for my clients on appliances, flooring upgrades, window treatments, closet organizers, storage cages, parking spaces - even asking for a new car!

A few of the words to describe new construction may be specific to the product, and the lingo may be confusing. Here is a brief glossary of the terms:

Phase: Units are sold in groups, also called a phase, so that the developer may not release all units at one time
Stack: A wing or line of units in one section of the building is referred to as a a ”stack”, often to reference a particular site/ location of the building and the outlook it provides
Elevation: the height of a unit is referred to as elevation, and can often lead to increased price if there is top floor or better views or high above street level (which can be quiet or receive more light
Siting: The location within the project/ building can be referred to as siting, and may reference a premium for it’s privacy, distance from the parking garage or better outlook/ views
Amenities: These refer to the HOA’s common areas, such as gym/ pool/ front desk attendant/ parking garage/ wi-fi/ etc. Items covered by your monthly HOA fees are referred to as building amenities

One particular item of note, if you are interested in being represented by a great agent like myself, you must attend the property with your agent first. We must “register” with the developer, otherwise, the in-house sales team may require that you work with their salesperson.

If you’re interested in utilizing a tool to search new construction, you can send me your search parameters and I can create a custom search. You can also use this tool: