by Mike Colpitts 
Buying new preconstruction condos have made many people very wealthy in real estate. Some purchasers have even made millions of dollars on new condominiums. But the preconstruction real estate market has changed.
New condo developments use to take from a year to a year and a half to complete. But following the series of Hurricanes to hit Florida, and other delays projects are now expected to take from 3 to 4 years to complete.
Developers discount preconstruction condos for new condo buyers. Prices are discounted to give buyers the incentive to wait for their new projects to be constructed and buy a unit that has not yet been built. Lenders typically require 70% to 80% of a project to be sold before construction begins.
Purchasers need to learn where they can buy new units to make substantial profits. Often times that is only with real estate agents who specialize in resort condo properties. Mike Colpitts exclusively represents condo buyers and is fully aware of the traps in the Florida condo buying maze.
There are Three Phases of buying new preconstruction condos. The First is the Reservation Agreement. The developer has preliminary building plans, which are subject to change and buyers make reservations with a deposit of generally $20,000 or more. The deposit is required to be held in an account that can be accessed in the state of Florida. Buyers can get a refund at any time.
The Second phase is when the purchaser receives the Florida State approved finalized condominium documents and “hard contract.” The buyer then needs to decide whether to go ahead with the purchase or cancel. After a contract is signed it becomes binding. The buyer pays the down payment, which is usually 20% and the developer uses these funds to help build the project.
Finally, after waiting for what is usually a number of years, the Third and Final Phase is when the condominium development is completed and a Certificate of Occupancy is issued. This is when the remaining balance and closing costs are paid, the purchaser signs the final closing papers, and the buyer becomes the condo owner. So what’s the catch?
There are many. Prices have been raised as much as 50% by some developers from registration to “hard contract.” Some projects are never completed. Others are left in limbo for years. Some are involved in legal battles that hang up construction for years. After all, there are two sides to every negotiation, and dealing with developers is no small thing. We’ve been doing it for years.
Mike Colpitts is not tied to one developer. We represent purchasers who are buying pre-construction condo units. Buying pre-construction condos, as you can see, can be a bit of a tricky business. The condominium boom has historically been strewn with traps. Many buildings appreciate greatly in a short period of time. Others do not.
If you’d like more information on condo developments and preconstruction in the Fort Myers real estate market just contact us.