How to buy a pre-construction Condo in South Florida
Important information to know if you’re interested in purchasing a pre-construction Condo in South Florida includes, but isn’t limited to the following:
- Determine your main property search criteria preferences: City location of the Condo, Downtown, Waterfront (Oceanfront, Intracoastal, Bayfront, Riverfront, Lakefront), Condos with Boat Dockage, number of Bedrooms, minimum Square feet and price range.
- Determine if properties that fit your search criteria are available within your price range.
- Are you interested in large Buildings or do you prefer small/Boutique style Buildings?
- Condos offer varying levels of Amenities. Are there specific Amenities that you prefer?
- What is your preferred time frame for moving into the Condo and does the Building’s estimated construction completion time frame fit your preference? Pre-construction Condos currently available in South Florida are planned for completion during the remainder of 2022 and during 2023 – 2026.
- In early phases of a Building’s construction, prices are lower and there’s a wider selection of Condos available. As more sales occur and construction progresses, Developers increase prices on a regular basis.
- Down payments for pre-construction Condos are cash payments made from the Buyer to the Developer. The average deposit range is 30% – 50%. Deposit payments may not be financed. The payments are made on a specific schedule, which varies per Building. The deposit payments are based on percentages of the Condo’s purchase price. At the time of closing/construction completion, it may be possible to obtain a Mortgage for the remaining balance, however, only specific Lenders offer financing for new construction Condos. At the beginning of closings, new construction Condos do not meet Lending criteria for conventional Fannie Mae backed Mortgages. I listed an example of a preconstruction Condo Deposit payment schedule below:
•10% Deposit payable when the Purchase Contract is executed
•10% Deposit payable 60 days after executing the Purchase Contract
•10% Deposit payable at Top-off/when the Building reaches construction of the Roof
•70% Balance due at the time of closing when construction is complete
- The majority of pre-construction Condos are luxury and ultra-luxury properties.
- NOTE: When a Buyer executes a Purchase Contract for a pre-construction, Developer owned property, they’re required by Florida Law to receive a 15-day Right of Rescission, within which the buyer reviews the Contract and may cancel the Contract and receive a full refund of their deposit or decide to proceed with the purchase.
- Choose a knowledgeable Real Estate Agent to work with. This is at zero cost to you as the Developer, not the Buyer, is responsible for paying Real Estate Agents.
- What is the Condo Association’s rental policy for Owners who rent their Condos? If you’re interested in renting the Condo at any point in the future, you should know what the rental policies are. Many Condos in South Florida don’t allow short-term rentals such as Airbnb, daily, weekly, or monthly rentals. Most require that rentals are a minimum of 3 months or 6 months and they also specify the maximum number of times that the Condo may be rented per year. Some only allow Annual rentals and a few don’t allow rentals at all. Some also don’t allow Owners to rent their Condos during their first year of ownership.
- What is the planned monthly maintenance fee? This varies per Building and is calculated per square foot of the Condo’s interior space (doesn’t include a Condo’s Balconies). The maintenance fee typically includes Water, Cable TV, Trash removal and Sewer, Amenities, Building Staff, Reserves, Pest control, maintenance of the Building’s exterior and common areas, and Insurance for the Building’s exterior and common areas.
- Do you have Pets? Condo Associations specify the maximum number of Pets that each Unit owner may have, the Breed of Pets and the maximum weight of Pets. A few Condos don’t have Pet weight restrictions, but the vast majority do.
- Know the quality of the Developer and the rest of the Development, construction, architectural and design team.
- Pre-construction Condos aren’t an appropriate target if you’re searching for “a deal”/discounts.
Starting your search for South Florida preconstruction Condos? Contact me for additional details and use the links below to view listings of preconstruction Condos located in Palm Beach, Broward and Miami-Dade County.