Miami Pre-Construction Information
At Andro Mateu, P.A. / The Keyes Company, we want you to feel confident in your real estate decisions. That’s why we’ve posted useful Miami pre-construction information on our website. Find out all you’ll need to know before venturing into the Miami pre-construction condo market. Get useful tips on how to approach buying a Miami pre-construction home.
Pre-Construction Homes in Miami
If you’re considering buying pre-construction in Miami, read through our pre-construction Q&A first. From downtown Miami to Miami Beach pre-construction condos, we can help you find what you’re looking for. Andro Mateu, P.A. / The Keyes Company is a one stop shop for information on Miami Beach and greater Miami pre-construction real estate.
Pre-Construction Q&A
Should a buyer use the services of a realtor when purchasing pre construction properties?
Yes, a realtor has relationships with developers that can be quite beneficial to the buyer. He/she can negotiate the terms of the contract for you and advise you on the best course of action depending on your needs; (the developer may not since it’s not always in their best interest to do so), the realtor may know some vital information regarding the financial status of the developer. The realtor is also in a position to inform you when new pre construction opportunities arise before they are even made public. This means the buyer may have an exclusive opportunity to get in on the ground floor of pre construction prices. Your realtor will find out information about the pricing in similar buildings being built in the neighborhood along with information about civic and cultural developments. Furthermore the developer compensates the realtor, so in effect you are getting the services of the realtor for free. Since the purchase price of the property is the same with or without a realtor it makes sense to have a person who is not just a real estate agent advise you, but a real estate consultant.
Why Pre-sell?
Most developers are unwilling or unable to place all their funds into construction of a development that is not assured of success. Also most construction lenders (Banks) feel the same way and want to be assured the construction loans can be repaid in a timely manor. The answer for the developer is pre-selling the development. If for some reason it does not sell then the developer is out only a small investment. Pre-selling of buildings and resort condominiums has become a standard process, and virtually every condominium is pre-sold today. Once the required pre-sales have been reached and construction has begun it is a sure sign of a successful development.
How do I know which project to pick in an area with multiple projects being built at the same time?
You pick the building with the least amount of units. Why? For an investor it means less competition from other investors within the building looking to resell at the same time as you. You should also pick one of the first projects to be finished in the same price range as your building. Why? It is the same concept as above but on a larger scale. Other investors in other buildings in the area will also be looking to resell as soon as they can. By minimizing your competition you increase your profit and minimize your time in the property.
Should I buy on a low or high floor?
That depends on your objective. If you are looking to resell for a profit as soon as possible the best unit to purchase is the least expensive on a low floor (view optional). Why? These units show the highest percentage of return based on previous resale figures thus having the widest margin of profit. On the other hand if you are looking to rent the unit to a tenant, you should consider a more expensive unit with a nice view. Why? Put yourself in the shoes of the renter. A renter expects a nice view in an area like Florida. Renters are on vacation and they want to see water, parks, boats, etc.
What does "need not be built" mean?
This is a question we get quite often and I will attempt to explain. During the marketing period of a pre-sale and before the developer knows if the project will be successful the "need not be built" disclaimer gives the developer protection from suits of nonperformance if he does not proceed with the construction. A very small protection for what sometimes is a very large investment risk.
As a purchaser what protection do I have buying a pre-sale?
While I can't speak for every location in the country, here in Florida the purchaser of a pre-sale condominium is protected in several ways. The most important protection under Florida law is your money or deposit is held in escrow until the condominium is completed and only released at a proper real estate closing where the unit is transferred to you unless the developer specifically indicates in the contract that a portion on the deposits will be used for construction.
What is a Public Offering Statement?
A Public Offering Statement includes condominium documents, association by-laws, and the pre-construction purchase and escrow agreement. Under Florida law, purchasers have fifteen (15) days from receipt to review and complete or rescind any pre-sale purchase and escrow agreement.
Why buy a pre-sale when I can buy one already completed?
Two basic reasons:
(1) Limited location and availability.
(2) By purchasing at pre-sale you are able to buy at a reduced price, and coupling this with the appreciative expectations upon completion makes it a very wise investment.
Many people have purchased pre-sales for reason number 2, and many of these people have sold their units even before the building is completed.
How much money do I need to contract a pre-sale condominium?
With most pre-sale developments all you need is a 10% deposit of the pre-sale price at contract time, a second 10% deposit when the developer breaks ground to hold the unit until completion. Some developers require that you act as the construction lender and pay the entire purchase price over predetermined construction stages (this is very rare in Florida), which can be somewhat limiting for some people. Irrevocable Letter of Credit or ILOC is sometimes utilized to contract a pre-sale condominium. The ILOC enables a purchaser to keep his money working in other investments during the marketing and construction period.
Can I sell my pre-sale purchase before completion?
In most cases, yes! You must have written permission from the developer, which is not a problem in most cases.
There are two basic ways to re-sell. (Depending on the developer)
(1) Selling your rights to the condominium unit by transferring or assigning the contract to a subsequent purchaser. This in reality is not selling real estate, you are selling contractual rights. In some cases profits may be smaller than the second option, but it has the same results!
(2) Selling your unit under a real estate contract to be consummated upon completion of the condominium. Two real estate closings will occur simultaneously, your purchase, and the sale to the subsequent purchaser.
Who may resell my condo?
You have two options in most cases:
(1) The developer may resell the unit for you for a commission.
(2) The realtor may sell your unit for a commission.
In most cases this is solely up to the client discretion who they feel more comfortable with.
What are the current pre construction price ranges in the Miami/Ft. Lauderdale areas?
$ - $360 per sq. foot Terrific buy
$360 - $450 per sq. foot Great buy
$460 - $510 per sq. foot Depending on the project location and the amenities it could still be a good buy.
$510 - $600 per sq. foot Luxury building
$610 - $1,000 per sq. foot Ultra luxury building
Thank your for your time, and we look forward to a long and profitable relationship with all of our clients.
For more information on upcoming pre construction projects and how to invest in them, please feel free to contact us by clicking here.
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