If you would like to know how to buy a Pre-Construction Condo in Miami, Florida. It’s a fairly straight forward process!
There are usually 4-steps in the buying process. All new development projects are different and there maybe some differences between them.
STEP 1: Reservation of your Pre-Construction Condo in Miami
Buying at early stages usually gets you the best prices on Condos. You will pay more buying at later stages of the construction. The early inventory is usually is sold off and the prices increase closer to completion. In order to take advantage of the best prices, it is best that you aim to reserve a unit by placing a 10%-20% deposit and signing the reservation agreement for your new unit. Find a list of Pre-Construction Condos in Miami for sale.
This reservation agreement will help you to understand and know the terms under which the deposit is fully refundable. These terms are the same or similar to a Right of Refusal to Purchase and both the developer and the buyer are able to cancel the reservation. Your deposit is important as it helps the developer to understand and estimate the interest in the project. Deposits will also assist with the projects funding and financing.
From time to time, you may be able to go straight to a contract without reservation. This happens especially if the project is near completion. For the buyers protection, your funds which have been deposited are secured in an escrow account that is fully refundable at any time in the pre-purchase stage.
After the Purchase Agreement has been signed, you are typically given 15 days to move forward with the purchase of your Miami condo or void the Agreement for a full refund.
STEP 2: Official Sale Contract
The next step of the process is where the developer has reached the target percentage of reservation agreements for the condos. At this time , your official contract will be prepared. We along will also assist you with any of your concerns and guide you with all the technical and legal details.
At this time, you will have 15 days to make a final decision on the purchase. It is best that you have an attorney review your contract and iron out any concerns you may have so that you are absolutely happy with the contract.
In 15 days, you are committed to the sale of the condo. From this time onwards, you would lose any deposit placed if you decided not to proceed with the sale. Between the next 30 and 60 days, you can sign the purchase agreement and this is where you will pay the second installment of 10%.
STEP 3: The Construction Phase
As the building is underway and being constructed, the developers will require you to pay additional down payments at different times of the build. The number of deposits and percentages will usually vary between buildings and developments. The good thing is that they will be outlined in your reservation agreement, so you don’t have to worry about any surprises.
STEP 4: Closing
Finally, when the building has been fully completed and the interior is finished, the developer will get a Certificate of Occupancy for you. At this stage you will be allowed to have a walk-through for inspection of the property. Once you are satisfied and happy with everything, a closing date will be scheduled. At settlement, all closing costs as well as the remaining balance of the purchase must be paid.
A few benefits of buying a Pre construction Miami Condo:
- No taxes on maintenance until closing.
- You buy the unit at the lower pre-construction price.
- You are getting brand new modern unit in up-and-coming areas.
- Usually good ROI on investment and usually professionals and families rent in these areas
- With new homes, the developers and builders will provide a warranty. They usually cover anything that gets damaged within the first year and others longer.
- A new home can ultimately prove to be a wise investment in the long term.
You can choose your exact location, customize the amenities, and, best of all, everything is new. For real estate investors, that peace of mind is priceless on these buys.
Approximately 24 months is a Typical Construction timeline for a High-rise, Pre-Construction Miami Condo:
- The Ground breaking
- Driving piles
- Pouring the Foundation
- 1 week for each typical floor
- The Middle of building
- Finishing all of the building interiors (Usually about 6-8 months)
- Certificate of Occupancy
Additional fees when purchasing a Pre Construction Miami Condo:
- Developer Fee (1.75%*)
- Title Insurance (provided by seller)
- Fees Associated with Closing and theCost of officially recording the deed
- Doc. Stamps to convey the unit
- “Working Capital Contribution”
- Potentially 2 (or 3) months Maintenance in advance
- 1st months maintenance and “Hook-Up” fees
- FPL charges to hook-up
- Water Hook-Up Fee (which is charged by city)
- Any Lender Fees (if the purchase is financed)
Some Buildings will require the Buyer to Finishing the interiors of the unit:
- Flooring & Painting
- Window treatments
- Closets, Finishes, etc
We hope this article helped you and we are happy to assist you in purchasing your beautiful condo!
Please visit the link and find our list of Pre-Construction Condos in Miami for sale. Full presentation and tours available.
Article by: Richie Quintyne | Broker at NVEST Estates