After a long financing freeze for large developments between 2008 and 2011, money is now flowing to construction and condominium developments are experiencing a boom in San Francisco! Buying in a new building is a smart choice – everything is brand new and you get to customize to your tastes. With many condo projects under way, buyers should have some great choices in the upcoming couple years.
If you are considering buying a unit in a new condominium project, here are four things you should know:
1. The quoted price is a base price. Buying a condo in a new development is a bit like buying a car. You start with the base model and add on premium features at an additional cost. So, the pricing you see at the Sales Office will be for a carpeted unit with no window treatments. Want hardwood floors? That’s extra. You may also have to pay for the in-unit washer and dryer, the refrigerator, and a glass enclosure for the shower and/or tub. All of this is conveniently available through their design center, but typically costs more than these items would if you bought them on your own. A parking space may or may not be included and could add or subtract $40,000 from your purchase price.
2. The Sales Office is working for the seller. When you walk into a Sales Office, you will find very friendly, knowledgeable and helpful sales staff. If you don’t have a real estate agent, they will gladly help you with your purchase offer. Remember that their #1 client is the developer, and they probably won’t put much effort into getting you any added benefits. The best thing you can do is have your own real estate agent who is looking out for your best interest. Buyer Tip: Make sure you write in your real estate agent’s name on the Sales Office registration card!
3. The buyer pays the Transfer Tax….twice! This is a bit of an odd way to say it, but it is the truth. In a real estate transaction, certain expenses are paid by the seller and others by the buyer. In San Francisco, the seller pays the Transfer Tax (a tax imposed by the City and County of San Francisco for the transfer of real property). The one exception? When the real property being transferred is a unit in a new development. So, the buyer pays the Transfer Tax when purchasing the property, but also has to pay the Transfer Tax when he or she becomes the seller and sells the unit.
4. You can’t immediately sell your unit. Not that you would want to! But buyers usually must hold onto their unit for 1 full year from occupancy before they can re-sell.
If you are interested in purchasing a unit in a new development, or would like help selling or buying a property, email me at firstname.lastname@example.org or give me a call at 415.533.2496. For more real estate insights, you can also follow me on Facebook and Twitter @AmyBlakeley.