As reported by the SF Planning Department's Q3 Report, San Francisco is in one of its biggest new construction booms in history. Since many of my clients are looking at (and purchasing) new construction condominiums, I think that it's a good time to talk about a few of the unique characteristics of these properties.
You'll notice that the chart above breaks down our current construction projects into four different categories. Between the Board of Supervisors, the Mayor's Office, the Planning Department, and neighborhood associations, there are many parties that developers must abide by and/or appease in order to create a successful and viable business venture. In conjunction with new seismic standards and the City's Inclusionary Housing Program, this is why developers charge a high premium for their properties.
Are you thinking about purchasing a new construction condominium? Here are a few things that you should know:
- Registration: On their websites or at open houses, these developers usually require visitors to register with them. If you intend to use a Realtor to represent you, be advised that you should always note it at registration! There have been instances where developers have refused to allow buyer representation if it wasn't noted during the initial registration.
- Contracts: Developers often make their own, unique contracts specifically for each project. They do not use the standard SFAR or CAR forms. Therefore, it's important to carefully review and inquire about the different clauses in these contracts so that you understand your rights as a future property owner.
- The Sales Process: Just like the contracts, the sales process for each development is unique for each project. Some developers adopt a "waitlist" system in which buyers are selected on a first-registered, first-served basis. Other developments market their properties in the same fashion as regular properties in San Francisco with an open auction process.
- Preferred Lenders: Developments often partner up with various lending institutions and promote these lenders for their projects. I and many other Realtors personally recommend these lenders since they are able to obtain information quickly from the developer and ensure a timely escrow process. Since there are usually at least two or more recommended lending institutions, buyers can still shop around to negotiate the best rate.
- Unusual Escrows: Escrow (definition) is unique since many developers presell their units before the building construction has been completed. Instead of the traditional 30-45 day close, the escrow timeline is at the mercy of the construction progress and the aforementioned inspections/approvals by the City. One of my clients has been patiently waiting to move into his unit since May!
Interested in learning more about the upcoming new developments? I've included an interactive map on my website of the most current projects in San Francisco. Websites such as SFCurbed and Socketsite also post updates on new developments around the City.