How to buy a pre-construction Condo in South Florida

When purchasing a pre-construction condominium, it’s crucial to evaluate your preferences and plan accordingly. Here's a detailed breakdown of key factors to consider:

Establish Your Property Criteria

1. Location: Determine your ideal city or neighborhood, whether downtown, waterfront, or areas offering boat dockage.

2. Features: Specify the number of bedrooms, minimum square footage, and budget.

3. Building Style: Decide between large high-rises or smaller boutique-style developments.

4. Amenities: Identify must-have amenities, such as pools, fitness centers, or concierge services.

5. Timing: Align your desired move-in timeline with the estimated completion date of the building. Current projects in South Florida are slated for completion between 2024 and 2029.

Early Purchases and Pricing

• Pre-construction condos often feature lower prices during the initial sales phase, with a wider selection of units available.

• Developers raise prices as construction progresses and sales increase, making early investment advantageous.

Understanding Deposits

Deposits for pre-construction condos are cash payments to the developer, held in escrow. These deposits range from 30%-50% of the purchase price and are typically non-financeable. A common deposit schedule includes:

• 10% at contract signing.

• 10% 60 days after signing.

• 10% at the building’s structural top-off.

• 70% balance at closing upon construction completion.

Financing options for the remaining balance may be available at closing through specialized lenders. However, new construction condos may not meet criteria for Fannie Mae-backed mortgages during the early closing stages.

Luxury Focus

The majority of pre-construction condos in South Florida fall into the luxury or ultra-luxury category. Discounts are rare in this market, as prices are structured to reflect the demand and exclusivity of these properties.

Legal Protections

Florida law provides buyers with a 15-day right of rescission after signing a purchase contract. This period allows you to review the agreement and cancel if necessary, with a full refund of your deposit.

Work with a Real Estate Agent

Partnering with an experienced real estate agent is invaluable, and their commission is covered by the developer—not the buyer.

Rental Policies

If you plan to rent the condo in the future, review the building’s rental policies. Restrictions vary but often include:

• Minimum lease durations (e.g., 3-6 months).

• Limits on the number of leases per year.

• Restrictions on short-term rentals (e.g., Airbnb).

• Policies prohibiting rentals within the first year of ownership.

Maintenance Fees

Monthly maintenance fees, calculated per square foot of the condo’s interior, cover:

• Utilities such as water, cable, and trash removal.

• Amenities and building staff.

• Pest control, reserves, and exterior/common area maintenance.

• Insurance for shared spaces.

Pet Policies

Condos typically enforce pet restrictions, including limits on the number of pets, breed restrictions, and weight limits. Some buildings have stricter rules than others, so verify these details beforehand.

Developer Reputation

Investigate the developer and their construction, design, and architectural teams to ensure a quality investment. Past projects can provide insight into their reliability and standards.

Resale Considerations

When exploring resale properties, be mindful that:

• Original purchase prices may reflect early pre-construction discounts, which do not represent current market value.

• Owners often invest in finishes such as flooring and lighting after purchase, adding to the condo’s overall value.