Buying New Construction Condo

Emily Myers is a senior writer, podcast host, and producer at Brick Underground. She writes about issues ranging from market analysis and tenants' rights to the intricacies of buying and selling condos and co-ops. As host of the Brick Underground podcast she has earned three silver awards from the National Association of Real Estate Editors.

buying new construction condo

Download Zip: https://www.google.com/url?q=https%3A%2F%2Fvittuv.com%2F2ugib7&sa=D&sntz=1&usg=AOvVaw2D-FIr7NPd4LIgwOHZe498

Read on for a detailed guide on why buying a new construction condo is an obvious choice for savvy buyers and investors, how to navigate a new construction financing nuance, and, of course, the benefits of living in a maintenance-free, professionally-managed home.

Bidding on a home essentially entails making the highest offer and agreeing to compromises such as dropping your financial contingencies and skipping inspection. The negotiations can also get intense if that particular condo is in high demand and the other buyers are just as determined as you are. Most buyers wind up frustrated and disappointed when someone else wins the bidding war.

When buying new construction, you can pick from a variety of floor plans to find the one that best suits your needs and preferences. The earlier a buyer engages in the pre-launch sales, the more opportunity they have to choose a preferred layout or influence finishes like floors, cabinets, countertops, and appliances.

Buying a new construction condo also obviously involves some paperwork. However, the process is purposely designed to be streamlined and super simple. The paperwork is far less complicated and will take up less of your valuable time and money compared to the alternative.

It is worth noting that a pre-constructed condo's price increases as the construction progresses and nears completion. As such, buying a new construction condo earlier (during the early construction phases) will save you more money than doing so later.

There are differences between buying a new construction condo and pre-existing inventory with respect to financing. The most notable difference is that you will have limited financing contingency options.

Given the unique nature of purchasing a new construction condominium, this process works differently. When purchasing a new construction property early in the process, buyers are still required to make a down payment in good faith. However, it can often take several months for construction to progress to a point where developers are legally able to close on the sale of a property. This window is longer than the typical mortgage contingency allows for, which also means a mortgage contingency cannot be included in a standard contract.

Undoubtedly, an ideal condo with your chosen floor plan and other preferences sounds perfect. It gets even better when living in a professionally-managed building with other resident owners. Some of the most notable benefits of living in a professionally-managed condo include:

While it can be satisfying to be the very first person to occupy a condo unit, there is inherent risk in being one of the founding owners in a condo project. Navigating the purchasing process should be done with a professional and experienced agent by your side.

So, you are thinking about buying a condo in Miami, either as an investment, a place to call home or a pie de terre for you and your family to visit whenever you wish. Regardless of the reason, buying a Miami condo should be a pleasurable experience that you can enjoy both financially and for your lifestyle.

Basically, a Pre-Construction Condo Property is one that you are buying before or while it is being built. You are buying your unit based off of the permitted plans, specifications and renderings of the building, and depending on where the building is during the construction process, possibly a partially built unit.

The development of a property has several stages, including planning and permitting, the construction and building process, and finally, the completion and move-in period. In a larger project like a high-rise condominium building, these stages are more specific given the scope of the project.

There are several reasons why buyers want to purchase a condo property during the early development period, or pre-construction period. You might be buying a pre-construction condo in Miami for one of these reasons:

Price - Oftentimes, developers offers early-bird pricing and certain incentives during the Pre-Construction period. This means you will likely get a better price for your condo by purchasing it early. Essentially, you want to lock in a beautiful condo at lower prices so you can benefit from rising real estate prices, while not actually having to worry about maintaining the real estate while it is being built.

Preference - You like being in charge of your own destiny, by having first choice at exactly the floor plan you want and exactly what floor you want -- options only pre-construction can offer.

This is one of the earliest stages to buy into a pre-construction project. As mentioned above, this is during the middle of the planning stages. Typically, the developer has all the floor plans and initial design of the building available. They usually have selected initial or final finishes, appliances, etc, so you will have a very strong idea of how your final unit will look like. The building plans are still in approval stages with the city, and the developer has also submitted for approval to officially register the condominium with the State of Florida.

At this point the developer has received approval on its plans from the city and also has received official approval for its Declaration of Condominium with the State of Florida. This typically happens 3-6 months after the beginning of the Reservation phase. Now the developer can officially go under contract for its pre-construction units. You will receive a developer contract and also the full condominium documents. At this time, the developer will typically require a total of 20% (if you already paid a 10% reservation fee then you will pay the 10% remaining balance).

Depending on the size of the building, it can take 12-18 months from groundbreaking to topping off. And while "topping off" is a major milestone in the construction of the new building, it is not yet complete. Once a building has been topped off, its exterior shell is finished, allowing the focus to safely move towards completing interior finishes. From topping off to completing interiors can take another 6 months or more.

The last stage of construction is just before closings can begin. Depending on your local government, this is often referred to as when the building gets it "TCO," or Temporary Certificate of Occupancy.

After pre-construction buyers begin to close, some may want to resell their units. Sometimes this still creates an opportunity to receive a discount on market price for the new buyers, and other times it provides a convenient opportunity to buy a unit that has already had the final finishes and interior design completed by the first owner.

Buying during the construction process of a new development has more steps than buying a completed product. Because of this, and because developers often want to sell as many units before completing construction, there are several ways to negotiate the best deals if you know how.

It is easy to get surprised at closing when you get your closing or settlement statement while purchasing a pre-construction property. Here are the things you will need to look out for at your pre-construction condo closing:

Choosing the right neighborhood and project comes down to lifestyle and budget. Each neighborhood and condo building has its benefits. We have a comprehensive review of each neighborhood, and you can also search each neighborhood for the pre-construction condo right for you to buy.

A: During the reservation phase the reservation agreements allow the buyer to cancel at any time for any reason. Once the buyer signs the actual purchase contract during the contract phase and receives the condominium documents, there is a 15-day rescission period governed by Florida law that allows the buyer to back out for any reason. After those 15 days, the contract does not leave any wiggle room to cancel without penalty of losing the deposit as long as the developer abides by his written promises in regard to the property.

A: In South Florida, your costs of having an agent help you with your purchase are completely free. However, selecting an agent that is not knowledgeable about your options, the pre-construction process and does not have experience in smart real estate investing can lead to a very costly result for you. That is why, at CondoBlackbook, we can partner you with a highly trusted and experienced agent to ensure that you get the best service and have all the information to make the best pre-construction purchase decision.

Many buyers also buy pre-construction as a way to partake in the growth momentum of a city without having to manage the property the first couple years of the investment (i.e. while it is still under construction). Many end-users who will live in the finished product love being the first to live in a brand new property with all of the most modern features and amenities.Already-built condos are excellent opportunities for buyers who plan on using their property right away, need immediate living arrangements, or prefer to have full visual certainty on what they are purchasing. Already-built properties offer the visual and spatial clarity some buyers are looking for.Q: Can I see what the finished product will look like before I make my purchase?

A: Developers usually charge 1.7 - 2% fee at closing to cover the sales taxes and other administrative and closing costs. In addition to that, you will be required to pay the first month of your association fees, plus the equivalent of two months of association fees into the reserve account of the condominium association for the purpose of a fund for future common area repairs and replacements.Q: What are the deposit requirements to secure a Miami preconstruction condo? 041b061a72