Austin Klar breaks down three reasons to think twice about new construction: developers lock in high prices to set market value, HOA fees are steep in early years to build reserves, and management is often chaotic because boards aren't formed until residents arrive.
Everyone loves shiny new construction buildings, but here are 3 reasons why you might want to avoid them. Number 1 is price. When new buildings come to market, developers set really aggressive price points because the first set of sales set the precedent for all prices of all the remaining units. So they're going to be very reluctant to budge and you're not likely to get a deal. Number 2 is HOA fees. New buildings have to establish healthy reserves, and to do that, it means hefty HOA fees, at least in the first few years of a new building's life. Number 3 is that there might be growing pains for the new building's management. Oftentimes HOA boards aren't even formed at the outset of a building's life, and oftentimes HOAs are made up of building residents, and when a building opens, there aren't any residents. So sometimes takes some time to get things administratively under control. Follow me for more home buying tips. [FOREIGN LANGUAGE]
