You see a tall and beautiful building under construction in a perfect location. The sign outside tells you that you can tour a model and buy on the first five floors today! As you walk through the unfinished lobby, you see potential through the construction, and you fall in love with the apartment’s space and decor. Although you may be tempted to sign on the dotted line right then and there, this unfinished building could turn from dream to nightmare.
Buying in unfinished buildings is risky because many things could go wrong. Although it may seem like construction is moving along nicely now, lenders can always change their minds and back out of the project, stopping construction and leaving an unfinished project halted and awaiting funding. Think of how many buildings you have seen or heard about sitting for ten years before a buyer comes along and decides to renovate. Or worse, tear the whole thing down to build something new.
If the project loses funding and you have already committed to living there, you may be stuck in a building that feels like a ghost town. The beautiful apartment that you fell in love with is still just as beautiful on the inside, but you have no neighbors and the building has an eerie quiet. The sense of community that you hoped to buy into is nonexistent, and you may not have enough money to try to find another place to live.
There are plenty of beautiful and finished buildings opening their doors around the country all the time, so if you feel tempted by that fancy new unfinished project, resist the urge to buy. In a year, if you still haven’t found the right place to live, maybe that dream building will be finished and you can buy into a safe bet.
