We’re all familiar with the idea of pre-ordering books, movies, video games and devices. You pay for an item before it comes out, ensuring you’ll get one of the hottest new gadgets or game consoles.
There’s a similar process when it comes to buying a condominium, but it’s one you’re probably less familiar with: the pre-sale condo.
A pre-sale condo is a unit that is for sale but that has not yet been built. Buyers review architectural models and renderings, then reserve a unit in a planned condominium building. Often, buyers can customize flooring and finishes to suit their individual taste. If you’re a buyer who’s drawn to new, it doesn’t get any newer than a condo that’s built for you.
The developer may need to pre-sell a certain number of units before construction begins, which will affect when construction will be complete. Solo Lofts in Ballard, for example, is expected to be complete within 10 to 14 months. This waiting period can be beneficial for buyers who want more time to save, since full payment isn’t due until the building is complete and the sale is closed. To buy a pre-sale condo, you will usually have to put down “earnest money,” often about 5 percent of the condo price. The earnest money is your commitment to purchase the unit. It’s rare for a buyer to lose the earnest money, but that money can be retained by the developer if the buyer backs out, depending on that developer’s policy.
If you need a home quickly, a pre-sale is not for you, but this option is perfect for buyers who want a new home to move into in the future, and who want to lock in a price and not worry about competing for units when a building is complete.
If you want to learn more about condos, the home buying and selling process or even home inspections, check the Redfin event schedule for upcoming classes in your area. For an example of a current pre-sale, check out Solo Lofts in Ballard, Seattle.