Thursday, November 20, 2008

The Me Too Clause

The Me Too Clause

For the last 5 years buying a new development condominium in New York City was a sure fire way of seeing a great return on your initial investment. If you bought in at the early stages of the initial offering, you waited and as the building went up, so did the prices of the available units. So by the time you actually closed on your apartment your exact same unit would probably sell for 10-20% than what you bought it for. This was one of the big reasons why there are so many new development condominiums in Manhattan.

Now that the piping hot real estate market in New York City has cooled off many of the new developments are struggling to find willing buyers to purchase the new product.

A recent buyer said, “Why should I buy now, when condo prices may tumble over the next year?” That’s a great question and this is what some of the developers are doing to handle that objection.

They are adding a price protection guarantee. So if a buyer signs today and if the developer drops prices while you are still waiting to close, you will be guaranteed the lowest price other buyers were able to negotiate.

This “me too clause” is not a universal offer for all developments, but for the developers that are employing this guarantee they are hoping to entice some of these nervous new development buyers who are concerned about the direction of the real estate market in New York City.

I think this incentive will help some of these new development condominiums. If I had a first time buyer purchasing one of these new development condominiums with this “me too clause” I would be very interested to see how the attorney’s write into the contracts how this clause will actually work.

If you are a first time buyer looking at a new development and want to know which buildings are participating in this new incentive, click here and we will email you the new developments that are offering this incentive.


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