First Release Purchasing Advantage
New Home Process
There are Four Main Phases of purchasing a new home or condo in the early stages of planning and development: reservation
agreement, right of recession period, contract for sale and closing. Under reservation agreement, the buyers are required to put
down a small deposit to reserve a particular unit or home. This deposit
may or may not go into an interest bearing bank trust account. In any
legitimate deal, the builder or developer does not have access to these funds. If
you are counting on price appreciation, then obviously you would like
your new home purchase to take as long as possible to build
after your price is locked in. To fully understand how profitable
buying a new home the moment it is released for sale, you need to understand the different
stages of pre-construction home buying.
Phase 1: (First Release Purchasing Advantage) This is the stage where homebuyers are alerted of the builder's initial sales release, selects a pre-constructed home and is often required
to get pre-approved by one of the builders selected lenders before they can reserve a new home or condo. At this point, the homebuyer puts down a deposit – a small percentage of
the purchase price. (Some builders require an additional deposit
during Phase 2.) The deposit is fully refundable during Phase 1.
However, the builder can also back out during this phase or change
his price. Phase 1 is a very loose relationship and sometimes risky for
the average homebuyer. In addition, the builder or developer may offer his friends
and family an opportunity to purchase prior to the initial public release.
Phase 2, 3: The Contract. A contract is drafted and a binding agreement between homebuilder and
buyer is made. Typically, the buyer has a 3-10 day right of refusal
period once a Phase 2 contract is signed. At this point deposit monies
may not be refundable. The homebuilder may or may not allow you to
“assign” your rights to sell your home prior to it being completed.
Many homebuilders do not allow assignment or non-owner occupancy, so a
buyer should read the contract carefully, ask questions and review all
the terms and conditions before signing. The buyer should know in
advance how an assignment would be carried out and when monies would be
paid.
Phase 4: Closing. At this stage, your home is complete and you close escrow much like you
would with a traditional purchase. Typically, from the time of the
homebuyer’s initial reservation and deposit, completion of the new home
may take up to twelve months. At this point, the buyer must have
financing in place and pay any remaining deposits. If the homebuyer
elects not to close, they will forfeit any money deposited as the
initial down payment. Also, there could be potential substantial liquid
damages constituting 3-5% of closing costs. Once the property is
closed, the buyer is responsible for making the loan payments to their
selected lender.
*Every effort has been made to accurately represent the above information. Members, Subscribers or Homebuyers who use our service are encouraged to perform their own due diligence in selecting and purchasing in any of our featured builder’s communities. We cannot guarantee success using the services of First Release Homes, nor are we responsible for any of our members’/subscribers’ results and or actions. First Release Homes is not affiliated with the builders or with the sales or marketing professionals who represent the builders. We provide a free service for our members in order to give them the benefit of locating, tracking and purchasing new home or condos the moment they are released for sale. Your purchase price remains the same whether or not you work with one of our new home specialists, or purchase directly from the developer or home builder. There is no guarantee that our members will secure a home, or realize any equity appreciation using the techniques and methods of First Release Homes. Certain statements contained within this website, including without limitation, statements containing the words "believes,” "anticipates,” "hopes,” "intends,” "expects,” and other words of similar importance, constitute "forward-looking" statements within the meaning of the Private Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors, which may cause actual events to differ materially from expectations.
