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Why go for preconstruction condos in Miami? |
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Written by Administrator
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Wednesday, 10 January 2007 |
Condominiums were introduced into the real estate market in 2002. But its banner years were in 2004 and 2005 where it registered its largest sold units.
In 2006, pre-sold condos in 2004 and 2005 are nearly completed hence the increase in number of available high end units either for sale or rent.
The entire Miami-Dade county has been experiencing enormous development in real estate in every conceivable price range one can think of. Condos are rising in every communities from South Beach to Aventura, Brickell Avenue to Dadeland, Downtown Miami to North Bay Village. You name it…you have it…this is Miami.
If you are to invest in preconstruction condos, you will be offered hundreds of opportunities to own “tomorrow’s home at today’s prices.” One of the biggest advantages you will derive in investing in Miami’s preconstruction condos is for you be able to get a preconstruction opportunity without spending a big amount of money.
Why? The reservation cost for a unit of preconstruction condo is a relatively small amount which is typically 10 to 20%. With this minimal investment, you are able to enjoy real estate appreciation of the property over time sans the carrying costs like interest and taxes.
Before you decide to invest, however, it would be best for you to have a bird’s eye view of certain development phases involved in preconstruction condos. This will enable you to avoid being snared in the real estate business.
First phase is the reservation stage wherein the developer offers the unit at the lowest price. Normally, price would fall below current market price. This gives the developer an opportunity to determine the demand for the project, and aids in the financial aspect encountered with their present lenders. Buyers are given the chance to reserve the units at the rate of at least 5-10% or maximum 20%. This is, of course, fully refundable should the transaction not materialize, as such is stipulated in a “reservation agreement.”
Second phase is the contract. Upon meeting the required reservation agreements, “hard contracts” are made. These documents will lay out all the legal and technical specifications of the condo project. This is the time when you will be required by the developers to fully pay the 10% of the contract price.
Next phase is the construction stage. Once the construction of the condo unit commences, you will have to pay another 10% as the completion of the 20% deposit. The project may be completed within 6 months to 2 years should construction goes on smoothly and no unnecessary delays are met.
The final phase is the “closing” wherein you will be required to complete the payment of the balance of 80% plus any mortgage or cash payoff, closing costs and all related expenses in any Miami real estate transaction.
Miami’s preconstruction condo is here to stay, so you might as well adapt to the scenario and go choose this timely investment.
Ma. Roma C. Agsalud
Miami Real Estate
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