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:

1. 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.
2. Determine if properties that fit your search criteria are available within your price range.
   
   
3. Are you interested in large Buildings or do you prefer small/Boutique style Buildings?
   
   
4. Condos offer varying levels of Amenities. Are there specific Amenities that you prefer?
   
   
5. 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 2024-2029.
   
   
6. At the time of initial pre-construction sales launch and early phases of a Building’s construction, prices are lower, and there’s a wider selection of Condos available. As more sales occur and various construction milestones are reached, Developers increase prices on a regular basis.
   
   
7. Down payments for pre-construction Condos are cash payments made from the Buyer to the Developer and held in an Escrow account. 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 might 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 the 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 the construction of the Roof
   •70% Balance due at the time of closing when construction is complete
   
   
8. The majority of pre-construction Condos in South Florida are luxury and ultra-luxury properties.
   
   
9. 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.
   
   
10. 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.
    
    
11. 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 rental,s 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.
    
    
12. 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 the 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.
    
    
13. 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.
    
    
14. Know the quality of the Developer and the rest of the Development, construction, architectural, and design team.
    
    
15. Pre-construction Condos aren’t an appropriate target to consider if you’re searching for “a deal”/discounts.
    
    
16. If you’re considering purchasing a new Condo on the resale market that’s owned by a property owner that recently purchased the Condo from the Developer, please note that the owner’s purchase price is the amount that was negotiated during the Condo’s pre-construction phase, which, in many cases, was several years ago. As such, their purchase prices were typically much lower and DO NOT reflect the property’s current market value. In addition, many new Condos are delivered to their owners without flooring, light fixtures, and numerous finish upgrades, so those items were completed by the Condo’s owner at an additional cost after they purchased it.