So you read #1 and got all excited about finding a contract, we all know it maybe a little cheaper then re-sale. But I have some news for you first:Do you have enough cash for downpayment?
The biggest mistake of contract buyers is that they forget who they are buying from. You are NOT buying from the builder, you are buying from a person who already signed a contract with the builder, and that Original Purchaser already put some money down, perhaps 20%.
Now, a person who is selling their contract want two things from you:
(1) the original downpayment, in full, now
(2) appreciation, now or later
Huh? Yossi, what are you talking about?
Think about it. If you had bought a condo which is still under construction and wanted to offload it, you have invested some serious cash in it, right? If you were to sell it, would you agree to have someone sign your contract without giving you back the money invested? no way! so, have the money ready, and pay it.
But I am a first time home buyer!!
Sure you are, but that’s only good if you’re taking a mortgage, and since the building is not closed (hence we are buying the contract) you can’t do that.
So, if I don’t have enough cash I can’t get a contract?
You’re probably better off with a re-sale then.
And if I have enough cash… then what?
Then email me with your hit list and we’ll take it from there!
Yossi Kaplan, MBA