Otto Milk Building FAQs

Otto buyers are an inquisitive bunch. Here are some of the questions we have been asked. If you still have more then drop us an email or give us a call (412-288-2566). We will be happy to answer your questions and may even add them to the FAQs!

What is the expected completion date?

Buyer move-in is anticipated for Late Fall of 2010.

Some units say “Sold”, others say “Reserved”. What are the requirements to reserve a unit?

“Reserved” simply means that we have committed buyers who are “in process”…reviewing the condo docs, exploring financing options, etc. Once a buyer has identified which particular unit they wish to purchase, we reserve their first right to purchase for a short period of time while they have the opportunity to review all of the condo documents and agreement, typically a couple of weeks.

Will the units have exposed brick walls?

The city has recently changed some of their building codes in order to achieve better energy efficiency in projects being developed in the city. They have informed us that all exterior walls need to be insulated. This means that we will then need to put drywall up over that insulation, thereby covering the existing brick. Several units will get the benefit of interior brick walls, but they are limited. If you really want brick we suggest you consider a #14, #15 or #16 unit. We expect those to have some brick on the sidewalls. It's a bad thing if you love brick walls but a good thing if you think energy conservation is a good idea. We are considering making a brick veneer available as an upgrade for those that want the look.

Is financing specific to lender?

Not at this time, but we may be exploring opportunities to collaborate with certain lenders in order to make things more efficient and potentially cost effective.

Do you have minimum deposit requirements?

Yes. A 5% earnest money deposit is required once the unit selection has been made. This is “hard” money, meaning it is non-refundable, but it locks in a buyer’s unit selection at today’s pre-construction pricing. (Presale prices with continue to rise as construction progresses, the earlier you buy the better deal you get.)

Once a unit is under contract do you make full payments through the pre-construction period?

No. Buyers do not have any further financial obligation until the unit is completed and ‘delivered’ to them. One caveat, should a buyer choose to upgrade their interior finishes, developers typically require payment in full upfront for any custom selections. Monthly mortgage payments and homeowners association dues will begin at settlement.

What will the condo fees be?

The condo (HOA) fees are currently estimated at 19-cents per unit square foot. This includes maintenance of the public areas, snow removal, garbage, water and sewer. This cost is a bit higher than our original estimate but the fees now include your water and sewer, as well as several other anticipated common expenses. HOA fees are subject to change based on common cost estimates and will ultimately be influenced by decisions made by the homeowner's association.

What is included in the condo fees?

All maintenance of the common areas and fitness center, snow removal, taxes and insurance of the common areas as well as garbage, water and sewer.

Is there parking available?

There will be a 2-story onsite parking garage behind the buildings with spaces available for purchase at $22,000 (uncovered) and $32,000 (covered). If you purchase a space(s), it can be added to the sale price/mortgage. PLEASE NOTE - as of 1/2/09 we are sold out of covered parking spaces, we can place your name on a waiting list should more spots become available.

What are the tax incentives?

The applicable tax incentive is the LERTA Enhanced Residential Tax Credit (Ord. 10). This program provides buyers with a real estate tax credit of up to $6180/year for 10-years on the purchase of a home/condominium in specific areas of the city, which equates to a monthly savings of more than $500, as taxes are typically included in a mortgage payment. There is also an additional county tax abatement that reduces your assessment by $86,750 for three years - resulting in an additional savings of several hundred dollars. See the tax page for more information.

Are there any other tax advantages?

Yes, real estate ownership typically provides you with income tax benefits. You’ll want to speak with a tax professional to determine just how this applies to your particular situation.

How much will my monthly payment be?

Your monthly payment will depend on a number of factors like the price of the unit, amount of down payment, loan terms such as interest rate and length of the mortgage. For example, let’s assume a 10% down payment on $183,000 unit ($18,300) leaving a mortgage amount of $164,700. At 6% rate for 30 years, your payment would be about $1284/month including principal (loan amount), interest (6%), insurance and monthly condo fees of about $100/month. Remember, this is just an estimate based on assumptions mentioned above.

What will I save if I buy vs. rent?

With prices starting at $183,000, mortgage payments for most units may approximate or be less than typical rents in the area. We suggest you check out one of the “rent vs. buy” calculators online that are quite helpful in calculating this savings. Here is one: http://moving.move.com/homefinance/calculators/rentbuy.asp

What if I make a deposit and then can’t obtain financing when it is time to close?

We do not have a provision (mortgage contingency) in our sales agreements. This is pretty standard in new/custom construction. A buyer’s “default” would occur should you not be able to obtain a mortgage, putting one’s hand money at risk. We highly recommend that you speak with a mortgage specialist for ‘pre-qualification’ prior to signing an agreement. We can help with that.

What if the project is aborted for some unforeseen reason?

As the Otto Milk Building conversion is beyond the ‘point of no return’, meaning we have secured project financing and are well underway with site clean up and preparation for development, we are not concerned about this. Should a dramatic unforeseen circumstance arise that prevents the project from being completed, the buyers would receive their hand money back. This buyer protection is provided for in the sales agreement.