new condo developer in nyc requiring $20% deposit

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Real Estate Agent with Compass

I attended a presentation from brokers marketing a new condo with anticipated closings starting March 2007. They are requiring 10% deposit with signing and another 10% in 90 days. No financing contingencies.

When asked why they responded "the developer felt less buyers would walk with 20% invested."

The lowest priced unit is $735,000. most are in the millions. I'm thinking who's going to walk from $73,000.  Then I realized that some buyers might have to. If interest rates go up they might not be qualified for the same amount 8 months from now.

 A mortgage broker from Wells Fargo that was present informed us that Wells Fargo has a product for new construction for 1/4 point they lock the rate for 1 year. If the rates go down you get the lower rate.

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Rainer
398,646
Linda Slocum
RE/MAX of Santa Clarita in Valencia - Santa Clarita, CA
Realtor - Santa Clarita
We've seen the same thing in our area where the demand for certain developments were very high. With the non-contingent requirement, they created a new class of "homeless" with people selling their homes and then renting apartments until their new construction was complete.
Aug 15, 2006 03:09 PM #1
Ambassador
938,758
Kristal Kraft
The Berkshire Group Realtors - Denver, CO
Selling Metro Denver Real Estate - 303-589-2022
New construction in Vail...  Same deal.  The interest there was so hot the builder was requiring and getting 25% deposits for a 2 year out build out.
Aug 15, 2006 03:30 PM #2
Rainer
474,633
Teri Isner
Keller Williams Realty at the Lakes - Orlando, FL
GRI, CRS, CIPS
Same thing here deposits from 5% to 20% being on the high end.  Most start with $5000 and then require the balance of the deposit when construction starts.  One company even now offers an interest bearing account to the customers at the Village of Imagine, behind the Orlando Convention Center.
Aug 16, 2006 08:16 AM #3
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Mitchell J Hall

Lic Associate RE Broker - Manhattan & Brooklyn
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