9 Tips When Buying a Pre-Construction Condo in Miami
Jan 04, 2021 January 04, 2021
When it comes to a city's growth, Miami’s pre-construction and new construction condo market has played a huge role in transforming the Magic City, from its skyline to global culture.
Every year, the bar is raised when it comes to new development and new buildings, with designer finishes, luxury amenities, unique offerings, big-ticket brands and designers lending their name to these amazing projects. Recent luxury developments, from Armani Casa to Fendi Chateau, Aston Martin, Missoni Baia, and Mr. C Residences, Miami has seen plenty of new condo development projects proposed and completed in recent years.
The appeal of being the first owner of a newly constructed home is very real. However, as a broker experienced in these types of new development condo sales, there are some tips you must know that will help you immensely when buying a pre-construction condo. Of course, reading the fine print of these pre-construction condo projects is important before committing your time and money. But there are also points that some developers may not always disclose.
Having helped many clients negotiate and close on pre-construction condos over the years, here are some top tips when buying a pre-construction condo. Also, check out our comprehensive guide to pre-construction condos.
Top 9 Tips When Buying a Pre-Construction Condo in Miami:
Tip #1 - Understand Square Feet: “Marketing” Square Feet vs “Real” Square Feet
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One of the biggest surprises we’ve seen buyers get is that the square footage for their condo seems to be much less upon completion. The deal here is that the “square feet” mentioned on marketing material is not set in stone, and if you look closely at their fine print or footnotes, you will even find that it's mentioned as “subject to change.”
A common reason for this is what the developers market as square feet is total square footage, not "walls in" square footage. They are often including columns, interior walls, and non-usable areas, such as where an A/C unit is placed. Walls-in square footage can often be 20% less square footage than promised.
Unless you have the square footage clearly defined in writing in your contract, don’t bet on it to be as advertised. You'll have to get it in writing in your contract that the square footage will not vary beyond a nominal amount (which a buyer’s agent can help you with) to be sure you get exactly what you see upon completion.
Tip #2 - Negotiate Your Preconstruction Condo
YES. Depending on the stage of development the new development is in, many aspects of a pre-construction condo contract can be negotiable.
- Floor plans – Depending on what stage of construction the project is in, sometimes it’s possible to make floor plan modifications. We have previously helped clients with disabilities make key modifications needed for ADA compliance and their overall comfort. We’ve also assisted in other customizations for clients who had a different vision of their unit layout than the developer.
- Interiors – Finishes (flooring, countertops, etc.) and the fixtures (appliances, lighting, bath tubs, etc.) can often be changed or customized if ordered early enough. If you're buying into a condo-hotel or designer-furnished condo, there are usually standard and upgraded furniture packages. You can negotiate to get the upgraded package at the standard or discounted rate.
- Add-ons – Additional parking spaces, boat dockage (to have or not to have), access to certain club memberships, and even certain amenities can be negotiated into your pre-construction condo contract. Concessions or additions can be discussed with the developer and discounted or charged for accordingly.
- Prices – Prices are often negotiable. Again, depending on what phase of construction or completion the new building is in, you can take advantage of strategic timing incentives. We've seen that developers are keen to make certain sales milestones for internal reasons and to satisfy lenders, often at mid-way points in construction, and also when nearing construction completion. Additionally, there are other aspects of a pre-construction purchase that may be negotiable. Again, depending on the stage of development, you can get closing credits or work in a better deal once you sit down for talks.
Tip #3 - Understand Early Bird Privileges in New Developments
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When you’re buying early into a pre-construction or new development condo project, check for early bird and friends and family incentives, such as “first tier pricing” options. A well-networked buyer’s agent will be able to give you insider information on the best pre-construction condo deals and when first-tier pricing will be available before things go public.
This is also the best time to get your choice of condo. Being one of the first few buyers gives you a bigger pool of unit choices to select from, allowing you to get the view you want, the unit floor you want or the corner unit you love.
Find answers to some of the most frequently asked questions (FAQs) about the pre-construction condo buying process here.
Tip #4 - Get Pre-Construction Condos Terms in Writing
We see a lot of buyers looking at the sales brochures or renderings and later wondering why the finished product wasn't quite what was initially advertised. By law, developers are allowed to have certain variables change from the advertised product, and the fine print will state this. For example, square footage, ceiling heights, balcony depth, layouts, finishes, brand of appliances, and certain amenities are examples of things that can change.
Like with any contract, if something is a deal breaker for you, get it in writing. If you find a developer marketing a boat dock for drop-offs, pick-ups, and day docking, you could very well end up with just a seawall if it wasn’t explicitly mentioned in the contract. So, be sure that your purchase contract or at least emails from the developer state in writing what you are buying.
Tip #5 - Square Footage, Monthly Maintenance Costs, Can Change Post Delivery
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As mentioned, square footage of your pre-construction condo can change after delivery because square footage can be determined differently. Once a project is completed, your unit square footage could change based on unforeseen construction issues. This can affect your HOA fees or maintenance cost per square foot. To understand more about your monthly maintenance fees in Miami, read Anatomy of HOA Fees.
Additionally, upon delivery of the new condo project, the developer is still the owner of the building until a certain percentage of the building is sold. At that point, the condo building will be turned over to a newly formed condo board association. In the condo development documents, the condo developer stipulates how monthly maintenance fees are to be calculated.
Once the condo building is complete and the developer retires from the project, the condo association taking over will reassess how HOA fees are calculated. In a real-time situation, the association will have a better assessment of the actual expenses, as well as likely hiring the services of a luxury condo building management association. A good estimate is to plan for a 5-15% increase in HOA or monthly maintenance fees once the building turnover has happened. An experienced buyer’s agent will know to negotiate a price discount in buildings with multiple amenities, to factor in the risk of higher maintenance costs once the new development is completed.
Tip #6 - Marketed Perks may not be “Forever” Perks
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If you’re buying a pre-construction condo because you really love the complimentary golf membership or a third-party beach club access that comes with the deal, consider that these perks usually have an expiration date. Generally, third-party memberships to golf clubs, beach clubs, etc., expire after about a year, or can be contingent on enough new owners buying in.
So, get details on the specifics of how long a marketed complimentary membership or third-party amenity is going to last, what your fees to maintain the membership may be after expiration, and what happens if the perk doesn’t materialize.
Tip #7 - Plan for Construction and Project Delays
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Anyone who has bought a pre-construction condo or been in construction knows that most large construction projects have delays and aren’t always delivered on time. Sometimes unexpected delays such as permit re-approvals, bad weather, and unforeseen glitches can delay delivery dates by a few or several months.
So, when buying a pre-construction condo, make sure to be flexible and plan for such delays. Do not make the mistake of scheduling your move on the date promised by the developer team, but be prepared to re-assess as the completion date for the new development approaches.
Our list of available Miami pre-construction condos and penthouses is updated daily.
Tip #8 - Forever Views may not be Forever
In a growing city, you can expect that new condo buildings and new development projects will continue to be built. So, if there is an empty lot, small building, or apartment building next door, you have to consider that one day it can, and likely will be built on. This could potentially impact your views.
Tip #9 - Have a Pre-Construction Pro on Your Side
When buying pre-construction condos, having a buyer’s agent on your side is smart. It puts a market expert on your side who is familiar with the preconstruction condo-buying process and often the developer, as well.
This agent can provide valuable insight into the developer’s product, past buildings and performance, explain the “what” behind the fine print, and have someone to professionally negotiate the details that are meaningful to you, execute your contract, and close your next pre-construction condo purchase.
Hopefully these pre-construction condo buying tips will help you in your decision to purchase into a new development or building. If you want more details on how to buy a pre-construction condo in Miami, read our comprehensive guide here.
You can also simply connect with an expert buyer’s agent at Blackbook Properties by calling or emailing us here to properly plan and execute your next pre-construction condo purchase in Miami.