4 Easy Steps

There are four easy Steps to Buying Pre-construction Property:

 1.  RESERVE A UNIT:

 James Burnes, Broker Associate ~ Century 21 Coast Properties,  will provide you with a set of the  developer’s preliminary floorplans, site plans, amenities and prices,  All are subject to change.  As a buyer, you can reserve unit(s) by signing a Reservation Agreement accompanied with a nominal “intent to buy” deposit – usually 5% or less of the purchase price.  This deposit is made to an interest bearing or non-interest bearing bank trust account.  It does not go to the developer.  It is during this intital offering phase that the developer offers the lowest prices of the condominium, quickly attracting many purchasers seeking maximum potential for appreciation.  As a buyer, you can get your deposit money at any time.   During this reservation period you are not obligated to purchase the condo and there is NO RISK.

2.  REVIEW THE CONDO DOCS
     THE RIGHT OF RECISION PERIOD

 While the developer is planning the condominium, a set of condominium documents are drafted and sent for final approval by the State of Florida .  The “condo-docs” are required and contain the details of the project including the site plans, floor plans, amenities, rules, by-laws, budget, etc.  It may take several months from initial reservation offering for the developer to receive final approval of the condo docs from the State of Florida .  Once approved, the developer will deliver the approved Condominium Documents to each buyer who has reserved a unit.  As a buyer, you then have to decide whether to go ahead with the purchase or to get your reservation deposit money back.

This phase is also called the “document examination” period.

3.  SIGN A CONTRACT FOR SALE :

If you decide to proceed forth with purchasing the condo you will then be required to sign a Purchase Agreement/Contract for Sale and put up the balance of the required earnest money – usually 20% of the contract price.  The Contract for Sale becomes binding on both you and the developer.  You may cancel your Purchase

Agreement up to fifteen (15) days after the date of execution and your receipt of all items that had been required to be delivered to you by the developer.  This phase is also called

“going to hard contract”.

Not all of the reservation agreements will convert to a contract for sale.  There are always a few people who fail to plan and are caught short of funds.  If enough of them convert, the developer gets the construction loan.  If the developer comes up short on conversions, he or she will have to obtain more sales before construction can begin.

It is after this period that the developer begins construction on the condominium, and depending on the size of the project it may take from several months to over a year for construction to be complete.  You are not required to do anything else as this time.  It is during this period, that the developer may increase the price one or several times on any remaining units for sale.  However, you have locked in at your initial offering price and now may reap the benefits of this price increase appreciation.

If a buyer learns of a new condominium project after the condo docs are ready available for review, then they immediately go to hard contract, skipping over the reservation agreement phase.  At this point they are obligated to purchase the condominium.  Remember though, that any time during construction is also considered a “value priced”  period as there may still be several price increases on the remaining condos until final completion.

4.  CLOSE THE SALE :

James Burnes, Broker Associate ~ Century 21 Coast Properties, will keep you informed of the estimated date of completion.  At least 45 days prior to the announcement of completion, it is advisable to arrange for any financing and insurance.  Some developers may allow purchasers to select from a few options for carpet color, vinyl, tile, etc. and you may be contracted to make your final selections prior to completion.

When the new condominium construction is completed the developer receives an issuance of Certificate of Occupancy. You or your selected representative will than do a walk-through inspection and provide a final “punch list” for the developer.  After this, you then go to closing.  The developer will select the closing

agent in most instances.  It is a closing where you will be required to provide the balance of the purchase price plus closing costs.  This is the happy day when you finally get to move in.

OTHER HELPFUL TIPS

DECORATING:  Furniture and/or upgrades are not usually included within the purchase price, so if you want to take occupancy as soon as possible, it is recommended that if you use an interior designer, that you meet with them well ahead of time, as furniture may take several weeks or months to be ordered and delivered.  Furniture cannot be delivered until after closing has occurred.

UTILITIES:  After completion, you will be notified to set up your accounts for electricity, cable TV and telephone (a switchboard phone system may be available at the condominium) and any landscaping and exterior building insurance are usually included within the condominium’s association fees.

RENTAL MANAGEMENT:  Many purchasers elect to use their new condo as a private second home.  However, if you plan to place your unit on the Coast Properties Resort Management rental program (or another management company), James Burnes can assist you with the names and contact numbers of the rental manager for your new condo.  Advance reservations for vacationing guest cannot be taken until a management agreement has been signed and the date has been set for when the condo will be “rental ready”, and is furnished with the basic minimum requirements.  You may obtain a list of these basic requirements in advance from the rental manager.