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Buying New Construction
The idea of shopping for a new construction Chicago condominiums residence can be quite daunting, but the benefits of owning a brand new home overcome the disadvantages if you know the potential pitfalls. The following are important considerations: overall dollar budget, location, and cost per square foot, finishes, upgrades, parking and delivery date.
To establish a budget for purchasing a Chicago condominiums home, you should speak with a mortgage professional before looking for property. Keep in mind that parking is usually not included in the purchase price given by the developer at the time of negotiation. In addition, in today's market the list price of the unit is typically not negotiable.
The best way to establish a budget is to determine how much money you will need as a down payment and how much you feel comfortable spending for monthly payments, based on your gross income. Remember that real estate taxes are generally included in your monthly mortgage payment and should be calculated at a minimum of 2% of the purchase price.
If your down payment is less than 20% of the purchase price, your lender will require that you purchase private mortgage insurance, this charge will also be included in your monthly payment. Also factored into your monthly expenses are your assessments, both for the unit itself and a separate assessment for parking. After summing this up, you can lastly add your monthly mortgage payment.
Generally speaking, the higher the density of the area, the more costly the Chicago condominium or townhouse will be. When considering the location, you may want to choose less developed areas of the city as properties are typically less expensive than those in more developed areas. It is highly likely that as density increases with new development, your property will gain in value, resulting in a higher return on your investment.
When investing in a new Chicago condominiums construction, the favored method of comparing the value of the property is by cost per square foot. This is the method used by developers to price their developments. With the cost per square foot in mind, you will be able to compare different properties on an equal basis and determine whether you are purchasing at a right price.
Another important point of consideration is whether the developer has included such items as granite counter tops, marble bathrooms, and black or stainless appliances as standard features. In Chicago, prices per square foot range from $324 to as much as $1,200 in the Gold Coast. You must examine which finishes and appliances the developer has included in the base price versus the upgrades. The more expensive finishes such as granite and marble are not usually included in the base price of a one-bedroom unit.
Be sure to get a detailed list of specifications in writing from the developer, indicating the brand and model number of each appliance. Models are typically finished with granite and marble and hardwood floors laid diagonally but such features are not usually standard, particularly in smaller or less expensive units.
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