Pre-construction FAQ

What is a pre-construction sale?

Pre-construction is an opportunity to purchase a condominium that has not been built, but has been proposed.

What are the benefits of buying pre-construction?

You take advantage of being in on the "ground floor". As the condo is being built it is hopefully appreciating over time. Based on market appreciation and expectations of completion the prices generally raise and your profit is created.

How much deposit is required?

It depends on the developer and the construction lender. Usually it is 15 to 20 percent of the purchase price.

Who holds the deposit monies?

An escrow agent of the developer. It can be a law firm, a title company, or a real estate agency. When the developer sells enough units, and is applying for his construction loan, you will be asked to go to a hard contract.

What is a hard contract?

A hard contract is the binding agreement that converts the reservation to a sale. When the contract is signed, generally you have 7 days to review the offering and make your decision on proceeding with the purchase or cancel.

Note: There will come a time during the offering, that you will go direct to hard contract. This usually happens after a short time during the selling process.

Note: Some developers go immediately to hard contract. It depends on the developer.

Can I sell my pre-sale purchase before completion?

You must have written permission from the developer. There are two basic ways to re-sell.

1. Selling your rights to the condominium unit by transferring or assigning the contract to a subsequent purchaser. This in reality is not selling real estate, you are selling contractual rights. In some cases profits may be smaller than the second option, but it has the same results!
2. Selling your unit under a real estate contract to be consummated upon completion of the condominium. Two real estate closings occur simultaneously, your purchase, and the sale to the subsequent purchaser.

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Feel free to contact me anytime! (850) 867-5875 or e-mail at jodig34@hotmail.com