As a Realtor, I see all kinds of people looking for all kinds of housing, and despite South Florida having thousands of existing homes for sale at any given time, sometimes buying an existing home just isn’t right.
A colleague recently told me of a family’s story that struck a chord. After spending three months working with a single mom looking for a great home for her and her five kids, everybody was losing the faith in finding the ‘the one’. Money wasn’t the issue. She had enough cash to buy the size home she wanted, but as a single mom she was afraid to buy a house that needed major renovations or repairs.
“We couldn’t find anything that would be a perfect fit and frustration was setting in,” explained real estate agent Ekaterina Khayrulina. “That’s when I said, let’s look elsewhere.”
Their off-MLS search took them to a spec home builder who had a model on a cul-de-sac, with several homes already in the construction phase. A tour of the model proved intriguing. It had 4 bedrooms and a loft. The buyer needed 5 bedrooms. The builder was able to accommodate the change. The builder also allowed the mom to choose the floors, colors, fencing and the type of stone finish that she dreamed about. Further, she was able to pick the lot furthest from the main road so her children were safer. The buyer was thrilled and excited. A purchase contract was signed with a promise that the home would be finished in 60 days.
The first stumble came at the 45-day mark. A visit to the site showed the builder behind schedule. Next hiccup, the flooring was discontinued and there was not enough tile on-site to finish the master bedroom. The builder had verbally promised to install glass shower doors that were never delivered and the washer and dryer units were missing.
Eventually, through rounds of additional negotiation and compromises, the home closed 47 days late and without all of the promised modifications. Despite all this, the buyer still felt overall that it was a positive outcome.
So, there are pros and cons to buying pre-construction and understanding them is critical if you want to seriously explore buying this way.
Pros:
● Find a house that is not available in the existing marketplace
● Can often negotiate a favorably low purchase price
● Custom finishes, colors and layouts
● Choice of location and yard shape/size
● Builder’s warranty (usually one-year)
● Brand new home up to latest codes results in lower insurance rates
Cons:
● Timing issues (construction delays are common)
● Additional builder’s fees (usually around 1.75% of sales price)
● Construction/material differences may occur
● Builder contracts (that favor the builder) are often required
● No option to choose the title company
● No cancellation option via inspection period
● No appraisal contingency
If you are ready to explore pre-construction, I am happy to talk about your particular needs and concerns.
Real Estate Update
As of November 1, the Pinecrest market became an even stronger buyer’s market. A healthy $1M+ market has 6-9 months of inventory. Pinecrest currently has 30 months.
If you’re ready to move, I can assist you with local expertise, realistic expectations and truthful guidance. It’s easy to get started at miamihal.com/getstarted.
Hal Feldman (MiamiHal) is a Realtor with RE/MAX Advance Realty. You can contact him with your story ideas or real estate questions at www.MiamiHal.com, Hal@MiamiHal.com or www.facebook.com/MiamiHal
