Tips on buying Pre-Construction

In today’s blog post we will cover the topic of Buying Pre-construction and the intricacies it involves.

In shaping Miami’s growth, the pre-construction and new condo development market has wielded a significant influence, orchestrating a transformation of the Magic City. This metamorphosis has transcended its skyline, infusing global culture and elevating its status as one of the world’s most sought-after cities.

With each passing year, the bar is set higher in the realm of new developments and condo constructions. These ventures boast designer finishes, opulent amenities, distinctive features, renowned brands, and the touch of celebrated designers, converging into remarkable projects. The landscape has witnessed the emergence of recent luxury developments such as Armani Casa, Fendi Chateau, Ritz Carlton Sunny Isles, Porsche Design Tower, and many more. The recent surge in new condo development projects has been a defining feature in Miami’s recent history.

The allure of becoming the first owner of a freshly constructed residence holds undeniable appeal. However, as a seasoned agent well-versed in the intricacies of pre-construction condo sales I can assure my buyers that there are pivotal insights to grasp before venturing into it. While dissecting the finer details of pre-construction condo projects is essential prior to committing time and resources, it’s equally vital to acknowledge that there might be undisclosed facets from developers.

Let’s go over some important points:

#1. Understanding Square Feet: “Marketing” Square Feet vs “Actual” Square Feet

One of the most surprising discoveries for buyers is that the actual square footage of their condo often ends up being notably smaller upon completion. The key lies in the fact that the “square feet” figure stated in marketing materials isn’t set in stone. If you closely examine the fine print or footnotes, you’ll notice it’s often labeled as “subject to change.”

This discrepancy often arises because developers advertise the total square footage, which includes various elements like columns, interior walls, and even non-usable spaces such as areas housing air conditioning units. The square footage promised can frequently be up to 20% more than the actual livable space.

To ensure accuracy, it’s crucial to have the square footage clearly defined in your contract. If it’s not explicitly detailed, it’s risky to assume it matches the advertised figure. To be absolutely sure of what you’re getting upon completion, it’s advisable to have it specified in writing that the square footage won’t deviate significantly (something a buyer’s agent can assist you with). This way, you’ll receive precisely what you anticipate.

#2 Ways to Negotiate your Pre-Construction condo.

The flexibility in a pre-construction condo contract can vary depending on the development stage.

Floor plans – At different construction stages, adjustments to floor plans may be possible. We had clients who were combining units and modifying floor plans significantly.  Customizations, even altering the single unit layout from the developer’s vision, have been done multiple times.

Interiors – The finishes (like flooring, countertops) and fixtures (such as appliances, lighting, bath fixtures) can often be tailored if ordered in advance. Most high end developments have interior packages selection that will allow future owners pick the color skim that matches their preferences. When it comes to condo-hotels or designer-furnished condos, standard and upgraded furniture packages are available. It’s often possible to negotiate for the upgraded package at a standard or discounted rate.

Add-ons – Elements like extra parking spaces, boat dockage, specific club memberships, and even certain amenities can be discussed and incorporated into the pre-construction condo contract. These concessions or enhancements can be negotiated with the developer, with adjusted pricing as needed.

Prices – Prices can sometimes be negotiated, particularly depending on the phase of construction or completion. Strategic timing can lead to incentives during specific construction milestones, often halfway through or close to completion. Other aspects of a pre-construction purchase might also be open to negotiation, such as closing credits or improved terms during discussions, contingent on the stage of development.

#3. Understand your Early Reservation Advantages

When you’re considering an early purchase in a pre-construction or new development condo project, keep an eye out for early bird incentives and friends and family offerings, often labeled as “first tier pricing.” An adept buyer’s agent with a strong network can provide you with exclusive insights into the finest pre-construction condo bargains, including the timing of first-tier pricing before public announcements.

This phase is also your prime opportunity to secure your preferred condo. As one of the initial buyers, you’ll have a wider array of unit selections at your disposal. This enables you to choose the exact view, unit floor, or even the coveted corner unit that resonates with your preferences.

Find answers to some of the most Frequently Asked Questions to Pre-Construction condo buying process HERE. 

#4. Get all the Negotiated Terms in Writing.

Many prospective buyers often rely heavily on  sales brochures or artist renderings, only to later discover that the final product doesn’t quite align with the initial advertisements. It’s important to note that developers are legally permitted to make certain alterations to the advertised product, as indicated in the fine print. These alterations can encompass various aspects such as square footage, ceiling heights, balcony dimensions, floor layouts, finishing touches, appliance brands, and specific amenities.

Just like any contractual agreement, if there’s a particular aspect that is non-negotiable for you, it’s crucial to have it documented. For instance, if you come across a developer marketing a self parking or garage parking within a valet only condo, it’s wise to ensure that these features are explicitly mentioned in the contract or in written communication from the developer. This way, you can be certain about what you are actually purchasing.

#5. Square Footage and Maintenance Fees can Change Post Delivery.

As mentioned previously, the size of your condo before it’s built can change once it’s finished. This happens because the way we measure the space can vary, and sometimes unexpected construction problems can affect it. This change in size can impact how much you pay for things like maintenance.

Here’s how it works: when the condo is done, the company that built it still owns the whole building until enough people buy condos. Once enough people buy in, a group of new owners like you takes over and forms a condo association. In the paperwork that sets up the condo, the builder says how they’ll calculate the monthly fees.

Once the building is all done, and the builder is no longer in charge, the condo association can rethink how they figure out the fees. They’ll have a better idea of how much things actually cost, and they might hire a management company to help.

Here’s the important part: it’s a good idea to expect that your fees might go up by 5-15% once the new owners are in charge. If you’re working with a smart real estate agent, they can try to get you a better price if the building has lots of extras like a gym or a pool, to help cover the risk of higher fees when the building is done.

#6 Marketing Incentives Wont be there “Forever”.

When you’re thinking about buying a condo that offers freebies like a golf membership or access to a beach club from a third party, remember that these perks often don’t last forever. Usually, these memberships to places like golf clubs or beach clubs expire after about a year. Sometimes, they depend on enough new condo owners joining in.

So, it’s a good idea to find out how long these free memberships or third-party perks will be valid for, how much it might cost to keep them after they expire, and what happens if you don’t end up getting the perk as promised.

#7 Construction delays are possible.

Anyone who has purchased a pre-construction condo or has experience in construction understands that large projects often encounter delays and may not be completed according to the initial timeline. Unforeseen issues like permit re-approvals, adverse weather conditions, and unexpected glitches can push back the anticipated delivery dates by a few months or even longer.

Therefore, when you’re in the process of buying a pre-construction condo, it’s essential to maintain flexibility and account for potential delays. Avoid the mistake of setting a fixed moving date based solely on the developer’s initial promise. Instead, be prepared to reassess your plans as the completion date for the new development draws nearer. This way, you can navigate any unexpected hiccups more smoothly.

#8 Views are not protected.

In a city that’s expanding, it’s a given that new condo buildings and development projects will keep popping up. Therefore, if you currently have an empty lot, a small building, or an apartment building next door, it’s important to keep in mind that one day, it’s quite likely that something new will be constructed there. This has the potential to affect the views from your property and, in turn, the future value of your condo.

#9. Have a Pre-construction agent on your side.

Remember, developers team is there to protect their own interests, not yours.

When you’re in the market for pre-construction condos, having a buyer’s agent by your side is a wise move. This decision aligns you with a market expert who not only understands the ins and outs of the pre-construction condo purchasing process but is also well-acquainted with the developer involved.

Your agent can offer invaluable insights into the developer’s track record, previous projects, and performance history. They’ll help you decode the fine print and skillfully negotiate the specific details that matter most to you. They’ll also handle the contract execution and guide you through the successful completion of your pre-construction condo purchase.

These tips for buying pre-construction condos should prove beneficial as you contemplate investing in a new development or building. If you’re seeking more in-depth information on purchasing pre-construction condos in Miami, I recommend checking out our comprehensive pre-construction buying guide.

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