Hey everyone… I’m looking into buying a new construction home that has all the permits completed like gas, sewage, and electrical. The only thing left seems to be the open building permit. I called the building department, and they mentioned that only the survey needs approval and then the final inspection. If I were to buy this place before everything’s done, could I just transfer all the permits to my name? The seller is only willing to put $5000 in escrow until the Certificate of Occupancy (CO) is complete. It seems like everything major is done, but I’m wondering if there are other risks I might be missing. This is in Hempstead, Long Island, NY. I know there are fines for moving in without a CO, but I’ve heard of many people doing it without getting fined… is that common? Any advice would be greatly appreciated. Thanks!
Have the seller get the CO before you buy it. Why would you even consider otherwise? Seriously, what are you thinking?
If you need a mortgage, forget it. You won’t be able to buy until there’s a Certificate of Occupancy. The lender won’t give you the money if you don’t have it. If you’re paying cash, you might make it work without the CO, but honestly, you really shouldn’t.
You really need a personal home inspection on a new build. Step back and follow the process. Rushing could be a big mistake. Do everything like you would if it were an older home. Don’t cut corners for any reason.
Absolutely not! Usually, in new construction, the builder provides the survey. If you have to, buy your own survey and let the seller deal with it. No CO, no sale.
Are you getting a loan or paying cash? If the lender finds out there isn’t a CO, they won’t fund the loan. It might also mess with your ability to insure it. New houses can be targeted for theft too, so if your appliances disappear, you might be on your own to replace them. It’s possible, but not a zero chance that something else can come up before the CO is issued. I’d let the builder handle it.
@Bailey
I’m thinking of paying cash… but it sounds risky. What do you think I should do?
Kit said:
@Bailey
I’m thinking of paying cash… but it sounds risky. What do you think I should do?
In that case, definitely make sure you know what you’re getting into. It’s better to wait and make sure everything’s in order.
There’s a reason they want a survey. It ensures the building isn’t on the wrong lot or violating setbacks. If that happens, you could end up with a non-occupiable place. This seller knows this and is pressuring you. Be cautious!
I closed on a new construction a few months ago, and the house failed the first CO inspection. The electrical box wasn’t hooked up, and half the house had no flooring.
Jordan said:
I closed on a new construction a few months ago, and the house failed the first CO inspection. The electrical box wasn’t hooked up, and half the house had no flooring.
Wow, that sounds stressful. I definitely don’t want to deal with that. What did you do?
@Kit
We had to wait for the builder to fix everything before we could move in. It was a hassle but worth it in the end.
You can’t get financing for new construction without a CO. If you’re paying cash, you really shouldn’t close without it.
Make the sale contingent on the seller getting the CO. That way, you’re protected.
Don’t do it, especially with all the red tape in Long Island. Once you buy it, any issues are your issues. I heard about a house in Nassau that was built too close to the property line, and the whole thing had to be torn down. Seriously think about this.