Here are some tips for buyers of condominiums in South Florida. I will continually add to this page as I have time.
Over the last couple of years the Miami Real Estate and Condo market has become complicated with terms such as shortsales, pre-foreclosure, lender-approval required, third party approval required, developer fees, etc. This section of our website is meant to be a short guide to some of the basics of buying a condominium in Miami and Miami Beach. For specific questions please feel free to ask us by posting a comment or by emailing us directly.
There are many types of condo units on the market today. A few years ago you basically has a few types - resales (condos built many years ago) and pre-construction condos (condos you would buy in advance of being built). Today many of those pre-construction condos have been completed and many of those early investors have defaulted (not been able to complete the purchase) - these units are available again as developer units. So today you have the opportunity to purchase these condos which are essentially brand new and have never been lived in direct from a developer.
Some things to consider when buying a pre-construction condo:
When you buy a pre-construction condo or a brand new condo directly from the developer there are often hidden fees involved besides your contract price.
1.) In your contract you will see "development fee" or "developer fee" which is typically 1.5%-1.8% of the purchase price. This is a fee that is paid in cash at closing to the builder. Part of this fee goes towards paying for the buyers title insurrance, and the rest is a profit for the developer or funds to offset miscellaneous costs incurred by the builder.
2.) You will also see in your contract "capital contributions" this is basically two months worth of maintanance fees collected from each purchaser of a new condo which goes towards creating an operating fund for the condominium association. This two months worth is not used towards your first two months of fees. This is also required to be paid in cash at the closing.
3.) Besides these fees you will have your ordinary closing costs containing document recording fees, deed taxes, any prorations for taxes, title service fees, utility hookup fees and attorney fees.