Interesting read in the NYT last week.  Below is one excerpt but the whole article is worth a good read:

Buyers who sign before construction is completed have always taken a risk that the building won’t look quite the way they imagined it. But these days, the biggest hazard of the preoccupancy purchase is that the building will lose its construction financing and then languish unfinished, wrapped in tarps — and wallpapered with your down payment — for an indefinite period of time.

If you are determined to buy in an unfinished building, research the construction lender. Many commercial banks are still on shaky footing. See if there has been any coverage in the media about the bank’s solvency. You can also try looking it up on the Web site of the Federal Deposit Insurance Corporation; go to the Enforcement Decisions and Orders page, look up your state, and see if any actions have been taken against that bank.

Full article here.