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
(786) 930-4220
contact@condoblackbook.com
Request Info
By sending you agree to CondoBlackBook's Terms of Use

Your Miami Condo Awaits

Recent Posts

Miami Spice is Here Early! Will Run Twice as Long this Year
Lifestyle Miami Spice is Here Early! Will Run Twice as Long this Year
Miami Spice Restaurant Months is a Miami tradition that showcases the very best of Miami’s diverse local cuisine and the talent and creativity of our city’s array of world-class chefs. The event allows restaurant-goers to enjoy three-course meals at some of Miami’s most exclusive restaurants for only $25 for lunch or brunch, and $39 each for dinner. This year, given the financial hit taken by local restaurants as a result of the coronavirus pandemic, Miami Spice is starting two months early -- hoping to lure customers back to Miami’s finest eateries by running the program for four months instead of the usual two beginning in late summer. If you live in Miami or frequently visit, you’ll know that Miami Spice normally starts at the beginning of August and continues until the end of September. The event was founded by the Greater Miami Convention and Visitors Bureau (GMCVB) as a way to give local restaurants a boost during the slow summer months. Now, it’s hoped that by starting Miami...
Missing Art? New Exhibits and a Pop-Up Shop Open in Miami’s Design District
Art/Design Missing Art? New Exhibits and a Pop-Up Shop Open in Miami’s Design District
Let’s face it, for those of us who love art, checking out a new exhibit after staying home so long is as good as a perfect morning latte. It’s refreshing, invigorating, and definitely going to make your day. As Miami’s Design District reopened on the 20th of May, the style destination got itself a brand-new art collection under the direction of new curator Claire Breukel, who also curates the Craig Robins Collection.  Here’s looking at all the exhibits on view in Miami’s Design District this summer: 3060 sq. ft. By: Tom Scicluna When: Through June 27Where: Paradise Plaza 133 Miami-based conceptual artist Tom Scicluna is known for his focus on sculptural works using found materials. Represented by Nina Johnson Gallery, the celebrated artist is known for creative works that question the ideas of artistic control, display, function of the art, and distance between idea and reality, as well as the viewer and image. This time, for his site-based intervention at Paradise Plaza, he has a...
Miami’s New and Pre-Construction Condo Update: May 2020
Real Estate News Miami’s New and Pre-Construction Condo Update: May 2020
This May, the Aston Martin Residences almost made a sales record for themselves as four units sold for a total of $8.75 million. The highly anticipated Una Residences broke ground. And, David Martin as well as Mast Capital proposed new towers for Miami Beach. Read on for details on these and other Miami condo pre-construction updates below: Broke Ground Una Residences – Brickell One of the newest, most exciting waterfront projects to come up in Miami, Una Residences, broke ground this May, embarking on its journey towards completion. The luxurious, nautically-inspired condo building comes designed by internationally acclaimed architects Adrian Smith + Gordon Gill, and sits on a rare slice of Bayfront land at the end of old Brickell Avenue in Miami’s Financial District.  Developer OKO Group aims to deliver the 47-story, 135-condo luxury development by 2023. Built to offer unobstructed city and Bay views, residents will be treated to amenities such as soothing wood-tone interiors,...
Latest Miami Celebrity Real Estate News - May 2020
Real Estate News Latest Miami Celebrity Real Estate News - May 2020
While the world continues to operate at a slower pace than usual, celebrity real estate news has not taken a break or a back seat to anything else that’s happening in the world. In Miami, movers and shakers continue to sell and buy property, and new stars continue to come to live in our town. This month’s lineup of celebrity real estate news includes celebrity buyers and sellers who influence and impact our lives, representing different industries and walks of life, as well as the purchases and sales they’ve made. Bought Who: Tommy Mattola and Thalia Where: $8 Million condo at The Surf Club in Surfside An LLC known as TNT Miami, managed by Mexican pop singer Thalia, along with her husband Tommy Mottola, the famed music industry tycoon, recently closed on an $8 million luxury condo at Surfside’s Four Seasons. The closing took place only a week after the state’s shelter-in-place order expired, per public documents filed with the county recorder. The 48-year-old Mexican singer is ...
Vizcaya is Open? Yep! Check out these Fun Things to Do in June
Lifestyle Vizcaya is Open? Yep! Check out these Fun Things to Do in June
For almost two months, Miami hasn’t been quite itself due to the coronavirus outbreak. We’ve missed all the fun events that put the magic in the Magic City. Thankfully, beginning May, the city has started to reopen (including restaurants at 50% capacity and the beaches), and we’re so glad to see some of our favorite hotspots either opening up or gearing up to open in June. So, for our monthly event roundup this time, we’ve got a mixed bag of virtual events as well as in-person events. Here’s looking at the things you can do (online or on the ground) in Miami for the month of June: Virtual Events Deering Estate Virtual Full Moon Yoga: June 4 Taking their monthly full moon yoga class online, yogi Zamanata will be leading a 75-minute Hatha flow session. For $10, you get to experience the transition of the Sun, Moon, and cosmic elements in a refreshing evening class. Those interested should pre-register here, or keep an eye out for when other in-person events come back up here. O...
Want to Live in a Penthouse? Here’s What You Need to Know
Opinions and Advice Want to Live in a Penthouse? Here’s What You Need to Know
Penthouses are the pinnacle of condo living. Living in a penthouse means waking up to sweeping views and expansive living spaces that feel like a home in the sky. Add on luxury amenities and, well, now you’re getting the picture. While it might sound cliche and too good to be true, this is the reality of owning a penthouse. But what really is penthouse apartment or condo? And are they worth it? Read on for answers to all of these questions about penthouses. So what IS a penthouse? Penthouses are, historically, a separate build on the very top of an apartment block or hotel, fitted with the best interiors, and both indoor and outdoor space. The term came about in the 1920s when developers started transforming previously undesirable and often dirty “attic” space into incredible and spacious  properties on the top of their developments. Distinguished by their opulence, as well as their world-class views, they were immediately popular and became synonymous with status and wealth (read...