Comprehensive Guide to Buying a Pre-construction Property or Condo in Miami

Comprehensive Guide to Buying a Pre-construction Property or Condo in Miami

May 22, 2017 May 22, 2017

Top  Why You Need to Read This Miami Pre-construction Condo Guide

So you are thinking about buying a condo in Miami either as an investment, a place to call home or a pie de terre for you and your family to visit whenever you wish. Regardless of the reason, buying a Miami condo should be a pleasurable experience that you can enjoy both financially and for your lifestyle.

NOTE: This guide is meant to be comprehensive starting point for you to get an initial understanding Miami condo pre-construction, but it should not be used as a replacement for legal or other professional advice. Every condo and situation is different, and unless we are privy to the exact pre-construction contract and condo you intend to buy and we are the ones signing as your realtor on the dotted line, we can’t make any guarantees to you.

Why Buy Pre-Construction

You might be buying a pre-construction condo in Miami for one of these reasons:
1. You want to lock in a beautiful condo at lower prices so you can benefit from rising real estate prices, while not actually having to worry about maintaining the real estate while it is being built
2. You love the fresh condo smell and knowing that you are the first owner.
3. You like being in charge of your own destiny, by having first choice at exactly the floor plan you want and exactly what floor you want -- options only pre-construction can offer.

If you are going to buy it, buy it right

If you are going to buy a pre-construction condo in Miami, here at CondoBlackBook, we want to make sure you do it right. This is the first time anyone has ever put together this anything-you-ever-wanted-to-know about preconstruction buying guide to make sure you have all your bases covered and you end up in a great condo that’s right for you in every way.

If we can save you a few dollars or a few headaches with any of the below pre-construction buying tips, that’s all we want to know!

List of Miami pre-construction properties


Top  Miami Pre-Construction Phases

When you are starting your search, you will get to condo projects at different stages of their development, and each stage has its own benefits. You definitely want to weigh in on which suits you best based on the factors we discuss below.

Pre-Construction Phase 1: Reservation

Reservation

In this phase the developer typically offers deep discounts for the buyers willing to jump onto the project early on to help the developer create buzz and get a strong pre-launch for the project. Typically the developer has all the floor plans and initial design of the building. They usually have selected initial or final finishes, appliances, etc, so you will have a very strong idea of how your final unit will look like. The building plans are still in approval stages with the city, and the developer has also submitted for approval to officially register the condominium with the state of Florida. During this phase the buyer is requested to sign a non-binding Reservation Agreement to secure their selected unit and must provide a 10% deposit to secure it.

Pros:
- Low deposit requirement;
- Wider selection of units to choose from;
- Lowest prices;
- No penalty to cancel at any time.
Cons:
- Some details about the building may change;
- Some unknowns remain;
- Occasionally the project may not be built (your deposit will be returned).

Pre-Construction Phase 2: Contract

Contract

At this point the developer has received approval on its plans from the city and also has received official approval for its Declaration of Condominium with the state of Florida. This typically happens 3-6 months after the beginning of the Reservation phase. Now the developer can officially go under contract for its pre-construction units. You will receive a developer contract and also the full condominium documents. At this time the developer will require a total of 20% (If you already paid 10% reservation fee then you will pay the 10% remaining balance).

Pros:
- What you see is what you get;
- More certainty that the condo will be built;
- Below-market prices.
Cons:
- Larger deposit required (typically 20%+);
- You only have 15 days to cancel and then you are obligated to move forward or lose your deposit;
- You may have less units to choose from.

Pre-Construction Phase 3: Construction

Construction

Construction begins with “groundbreaking” where the developer starts building the foundation of the project. At this point, the developer typically requests an additional 10+% deposit, and then at certain milestones of construction such as when reach the “top off” (i.e. when they pour the concrete at the top of the building), they will request deposits until they reach 50% total deposit.

Pros:
- 2 years or less away from Closing;
- Building plans and finishes are most certain;
- Below-market prices.
Cons:
- Less selection on inventory;
- Deposit requirement will likely be 30-50% depending on time of entry.

Pre-Construction Phase 4: Completion/Closing

Completion/Closing

“Closing” is the day the complete monies are exchanged with the seller/developer and the buyer becomes the official owner of the property. Once the developer receives the Certificate of Occupancy (CO) from the County, which gives permission for people to start residing in the property, the developer will send out letters requesting closing within 30-days.

Pros:
- See the finished product before buying.
Cons:
- Close-to-market prices;
- Less selection of condo inventory.

Pre-Construction Phase 5: New Construction Re-sales

New Construction Re-sales

After pre-constructions buyers begin to close, some may want to resell their units. Sometimes this still creates an opportunity to receive a discount on market price, and other times it provides a convenient opportunity to buy a unit that has already had the final finishes and interior design completed by the first owner.

Pros:
- See the finished product before buying;
- May already have final touches and upgrades;
- More flexible move-in options;
- Developer fee already paid.
Cons:
- More likely buying at or close to current market prices;
- Less selection of condo inventory.


SEARCH ALL MIAMI AREA PRE-CONSTRUCTION LISTINGS

Top  How to Negotiate the Best Miami Pre-Construction Deal

1. Timing. We find that developers are most flexible in negotiations during specific thresholds

  • Of course, if the market is soft. Consult your real estate broker on the latest market statistics
  • When they are close to 50% sales
  • Right after they have their construction loan
  • When they have their last remaining units left. The developer is many time ready to sell and move on.

2. Parking. Sometimes you can get an extra parking space thrown into the deal.
3. Developer Fees. These can be negotiated down or wiped out altogether
4. Finishes (i.e. flooring upgrades, carpet credit, etc)
5. Your Real Estate Agent. Many agents are more hungry for the sale in front of them than for the value of the long-term relationship that working with you can bring. Hire a pro who will negotiate on your behalf and looks out for the fine details that put you in the best position. Negotiating with developers is not easy. Sometimes it takes weeks, and many times you have to know who to talk to up the ladder.

Top  How to Finance Pre-Construction Property

Pre-construction properties are almost always cash contracts. This doesn’t mean that you can’t get a loan or financing for your pre-construction property. It simply means that if you can’t get a loan to close on the condo unit, you won’t be able to use that as an excuse to get your deposit back. For each project, there are lenders that are able to offer pre-construction financing.

Top  Closing Costs for Pre-Construction Properties

It is easy to get surprised at closing when you get your closing or settlement statement. Here are the things you will need to look out for at your pre-construction condo closing.

  1. Developer fee. Usually from 1.5-2.7%. Sometimes you can negotiate this out.
  2. Title insurance. This could be included in the developer fee.
  3. Operating Account / Reserves. You will always be asked to pay 2 months worth of association fees to help build the initial operating account, and possibly the accounts the association will for replacement reserves (savings for when major items in the building need to be replaced)
  4. Association fee. 1 month association fee in advance
  5. Lender Closing Fees. If you are financing your pre-construction property, your lender will have a number of closing fees including, origination fees, lender title insurance, appraisal fee, and possibly others.

Top  Choosing the Right Miami Neighborhood and Project for Your Pre-Construction Purchase

Choosing the right neighborhood and project comes down to lifestyle and budget. Each neighborhood and condo building has its benefits. We have a comprehensive review of each neighborhood, and you can also search each neighborhood for the pre-construction condo right for you to buy.

Top  List of Miami Pre-Construction and New Construction Properties

MIAMI BEACH Pre-Construction Condos for sale:

MIAMI BEACH

Mid-Beach Pre-Construction Condos for sale  
North Beach Pre-Construction Condos for sale
South Beach Pre-Construction Condos for sale
Venetian Islands Pre-Construction Condos for sale

MIAMI Pre-Construction Condos for sale:

MIAMI

Arts & Entertainment District Pre-Construction Condos for sale
Edgewater Pre-Construction Condos for sale
Biscayne Corridor North Pre-Construction Condos for sale
Design District / Buena Vista Pre-Construction Condos for sale
Coral Way Pre-Construction Condos for sale
Dadeland Pre-Construction Condos for sale
Downtown Miami Pre-Construction Condos for sale
Wynwood Pre-Construction Condos for sale
Coconut Grove Pre-Construction Condos for sale
Miami River Pre-Construction Condos for sale
Brickell Pre-Construction Condos for sale
Brickell Key Pre-Construction Condos for sale
Upper East Side Pre-Construction Condos for sale

Other cities Pre-Construction Condos for sale:

Other cities

Hollywood Pre-Construction Condos for sale
Aventura Pre-Construction Condos for sale
Bal Harbour Pre-Construction Condos for sale
Coral Gables Pre-Construction Condos for sale
Hallandale Beach Pre-Construction Condos for sale
Key Biscayne Pre-Construction Condos for sale
North Bay Village Pre-Construction Condos for sale
North Miami Beach Pre-Construction Condos for sale
Sunny Isles Beach Pre-Construction Condos for sale


ADVANCED SEARCH OF ALL MIAMI AREA PRE-CONSTRUCTION LISTINGS


Top  Tips on How to Cancel or Get Out of a Pre-Construction Contract

You will likely be best off with a lawyer if you need to cancel your pre-construction contract. Some things your lawyer will likely look through to find a way out are:

  1. Condo docs. If there were any amendments to the condo docs from when you first saw them.
  2. Construction timelines. If the developer promised certain condo construction timelines in the contract but didn’t deliver.
  3. Defects/Variations. If there were any material defects or differences in what you were promised and what was delivered.

Do You Have More Questions?

Check out our pre-construction frequently asked questions here.
Or call the pre-construction condo experts at 786-930-4220.

Contact Sep Niakan
Founder, Condoblackbook.com & Owner/Broker, HB Roswell Realty
(305) 697-7667
contact@condoblackbook.com
Request Info
By sending you agree to CondoBlackBook's Terms of Use

Your Miami Condo Awaits

Recent Posts

How to Find a Good Miami Handyman or Contractor
Lifestyle How to Find a Good Miami Handyman or Contractor
Leaky faucet keeping you up at night? Porch lights been flickering a long time? Ready to renovate the kitchen? Keeping up with minor home repairs, cleaning and renovations seem like trivial tasks, yet they are important things on a homeowner's to-do list. And at times, finding the right person to get the job done is often more time-consuming than the task itself. Now, we all know the pain of getting stuck with the wrong service provider or handyman and losing more than just sleep in the process. So, to help you avoid making such costly mistakes when looking for a handyman, electrician, painter, plumber or cleaning service in Miami, we've put together a little checklist to help you get in touch with the right person for the job. Here's diving in: Be Clear on The Scope of Work Before you begin your hunt for a good handyman or home service vendor in Miami, jot down everything that needs to be done or fixed. Is it just repairs or will it be a couple of things part of a home improvement...
New Emotional Support Animal Law Florida 2020 - What it Means for Landlords and Condo Residents with an ESA Dog or Cat
Opinions and Advice New Emotional Support Animal Law Florida 2020 - What it Means for Landlords and Condo Residents with an ESA Dog or Cat
Do you have an Emotional Support Animal? Maybe you have an emotional support dog and are moving? Mental health is of paramount importance, especially in these times. With all the thought and energy we spend on our physical health it makes sense that we also take care of our mental health. One way emotional conditions are treated is with emotional support animals (ESA), usually an emotional support dog or cat. But if you have an ESA, and as a person with an emotional condition or disability, finding a new home comes with a whole new set of challenges only you can know. And no one needs the added fear and stress of possibly being denied housing or being discriminated against for owning an ESA.  Thankfully, a new law has been passed in Florida this year, effective July 1, 2020, which explicitly states what you and your current/prospective housing provider can and cannot do in regards to Emotional Service Animals. The law applies to all condos, apartments, and rental homes. This new law...
Miami’s New and Pre-Construction Condo Update: July 2020
Real Estate News Miami’s New and Pre-Construction Condo Update: July 2020
Last month in July, Miami’s construction landscape was busy. The long-anticipated Mr. C Residences in Coconut Grove and Smart Brickell’s second tower both broke ground, David Martin’s South Beach Marina Park is set for round two of approvals, Fisher Island’s Palazzo Del Sol developers announced a brand-new condo project, and much more. Read on for details on these and more preconstruction condo updates in our monthly roundup: Broke Ground Smart Brickell Tower II - Brickell With its ground breaking streamed live on Instagram, Smart Brickell’s second tower started construction last month in July. The LEED-certified towers come designed by Gensler, Miami’s-own HAC Architects and Urbanists, plus Arquitectonica Interiors incorporating a unique, “Smart” philosophy from lobby to rooftop. Each fully-finished and furnished residence will come equipped with smart, Wi-Fi enabled tech such as smart fixtures, Amazon’s Alexa, and a SmartCondo concierge app. The entire complex, with its two...
Miami Beach Luxury Condo Market Report Q2 2020
Real Estate News Miami Beach Luxury Condo Market Report Q2 2020
CondoBlackBook.com's overall Miami luxury condo market report for Q2 2020 unveiled the full impact the global health crisis had on sales, prices and other metrics as part of our quarterly analysis. As expected, sales slowed down and, as a result, inventory levels went up. The days condos spent on the market declined, however, that was more so due to sellers temporarily taking properties off the market and in part due to improved buyer-seller dialogue. Good news came in the form of sales prices holding their own – even posting gains - showing that sellers still got good value for their luxury condos, irrespective of a global slowdown. Miami Beach was the only grouping in our first quarter study to report a (18.3%) drop in year-over-year sales. So, as the global health crisis unfolded during the second quarter, it was unclear how one of the most popular cities in the world would fare, however it seems that the beaches managed to hold their own. South Beach went from being the worst...
Greater Downtown Miami Luxury Condo Market Report Q2 2020
Brickell Greater Downtown Miami Luxury Condo Market Report Q2 2020
CondoBlackBook.com's overall Miami luxury condo market report for Q2 2020 revealed the full impact of the pandemic with an inevitable slowdown in sales and increase in inventory for all of Miami's luxury condos. This has naturally extended the life cycle of the ongoing buyer's market trend for luxury condos. Days spent on the market dropped, partly due to sellers taking properties off the market and partly due to an improved buyer-seller dialogue. Prices, however, posted an increase, showing that sellers still got fair value for their luxury condos. Analysis of the Greater Downtown Miami (GDM) neighborhood (inclusive of Edgewater and Brickell), continues the overall Miami trends -- sales dropped and inventory increased slightly. However, Edgewater turns out to be the least affected neighborhood in all of Miami, in terms of a sales slowdown due to the pandemic. On the other hand, Brickell bears the full brunt of the slowdown, reporting the biggest drop in sales of all Miami...
Coral Gables and Coconut Grove Luxury Condo Market Report Q2 2020
Real Estate News Coral Gables and Coconut Grove Luxury Condo Market Report Q2 2020
As our CondoBlackBook.com 2Q20 report for this combined neighborhood showed exceptional sales growth, the outlook for 2Q20 was more than positive. However, with the COVID-19 situation unfolding globally, the full impact on numbers can be seen this quarter. Much like the overall Miami luxury condo market for 2Q20, sales are naturally down year-over-year. Still, the tail-end of the quarter has revealed signs of a recovery, which is likely to continue into the third quarter, at least. Median Sales Prices also show an upward trend, in sync with the overall market trend in Miami, showing that sellers received good value for their properties even as the pandemic weighed down on sales. Read on below for a more detailed analysis of the impact on monthly sales, the Price per Sq. Ft., Days on Market and Months of Inventory in this second-quarter plus how trends correlate to the overall luxury condo market in Miami. For the purpose of this Miami submarket luxury condo report, we've only...