Pre-construction in Miami is a great opportunity for buyers and investors to take advantage of the lowest possible prices for properties out of the 250 new projects in up-and-coming areas like Edgewater, Midtown, Brickell, Downtown Miami and the Design District, or in the most sought after areas in Miami like Sunny Isles Beach, Miami Beach, Key Biscayne and Coconut Grove.
Prices are at their lowest at the moment of reservation and the time between the reservation and completion of the building is usually between two to three years, giving to most buyers at least a couple years of appreciation until completion of the building without the carrying costs, such as interest and taxes. The increase in prices of most developers between the project’s commencement and completion, it is usually around 25 percent.
Stage 1: Reservation
In the reservation stage the properties are offered at below the market price. The buyer will find the great chance to reserve the chosen unit with a deposit of 10% of the unit value, with a reservation agreement. This money is deposited in an “escrow” account, account in which funds are accumulated for specific disbursements. In this phase, until the next called contract, the money can return to the buyer without any penalty.
Stage 2: Contract
Once the developer reaches the point of the required number of reservation agreements, usually after 2-3 months, hard-contracts, which are preconstruction purchase contract and an escrow agreement, are asked to be signed and the By-Laws (condo-docs) are given to the buyers. This document enumerates in detail all the legal and technical specifications of the development. At this point, when buyer signs the contract, he or she has 15 days rescission period, where they have the possibility to withdraw from the purchase. Another 10% in escrow is required.
Stage 3: Ground Break
When the construction of the project initiates, called ground break, a second deposit of 15% is needed. The construction may take between 18 months to 2 years. Another 15% deposit may be required when construction reaches level where buyer's property is or when roof of the building is complete.
Stage 4: Closing
Once the development is completed, buyer completes the transaction by paying off the unit. At this point, the remaining percentage will be required, and the mortgage or the cash payoff will have to be available, along with the closing costs and all the typical expenses related to a Florida real estate transaction.
Keep you up-to-date on new pre-construction projects coming to the market before they are made public.
Make a comparable analysis on prices for sale and for rent, in case you’re an investor and you want to rent it out after the completion, in similar buildings in the neighborhood, to evaluate the projected values of your investment.
Inform you about community infrastructure developments such as services, retail, public and private urban investments that may influence the future value of your property.
Help you negotiate the terms of the contract and advise you on alternative choices that may meet your needs.
Share information regarding the relative financial strength and track record of a developer with you.
Finally, since all realty fees are paid by the developer, all our services to you are for free!
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