Our Buyer's Guide: Pre-Consutruction Condo Projects
When it comes to buying a unit in one of Honolulu's many condo buildings, working with an experienced real estate professional is the key to success. I've advised countless buyers thoughout my career with purchasing pre-construction projects that have a 4 year lead time between unit "reservation" and completion. In this Guide we'll go over the pre-construction buying process and what you can expect when purchasing from most developers here in Honolulu.
Step 1: Finding the right project
In Honolulu, you'll always have at least a couple of options with pre-cosntruction condos and often times these projects will be in various phases of developement. That means it could be in a really early phase where construction on the actual condo hasn't even started yet, or it could be almost complete where you could potentially move-in to your new condo within a few months. If you're buying in a project that's in the latter phase where you could be moving in within a few months you have a little less to worry about and it's even possible that you can tour the actual unit you want to buy before putting your money down.
For those of you looking to buy into a project that is just launching, meaning the initial sales phase has just started, here are some things for you to consider.
Who is the developer? Knowing who you're buying your condo from is really really important. It's like buying a brand new car from a company you've never heard of. In Honolulu you have a handful of developers that do a majority of the projects. Howard Hughes for example has a proven track record of success in Honolulu designing and developing Ward Village. The Kobayashi Group who developed Park Lane, One Ala Moana, Hokua, and a few others also has a history of development here in Honolulu and buyers will put their trust into these developers over and over again and some buy into multiple projects simply because they know they'll get an end product that meets or exceeds their expectations.
Unsure about a particular project and the developer's history? I'd be happy to chat with you and lend you my thoughts.
Now that we've picked the right project, what do we now?
Here in Honolulu, the deposit structure for purchasing new construction is pretty similar with all developers. Most developers will require a 20% deposit due in the first 4 months of your purchase. Typically it's a 5% deposit when you sign the contract, another 5% deposit after your 30 day rescission period is over (we'll get into what this period is for) and a final 10% deposit 90 - 120 days from contract signing for a total of 20%. So on a $1,000,000 purchase your total deposit due in the first 4 months will be $200,000.