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Buying a property in pre construction in Florida without the help of an experienced broker in this niche (launches and new constructions) can become a big nightmare!
Real estate on pre construction brings enormous advantages to investors, since they are offered with first list prices and long payment terms.
In addition, the property is brand new and you and your family will be the first to use it. You can customize the way you want. There is also the advantage of being a property free of problems caused by previous owners.
This perception that the risk is lower when buying a property in pre construction leads some people to contact the construction company directly, without the participation of a real estate broker in Florida.
Unfortunately, it’s not that simple and problems do exist!
Some investors even believe that if they negotiate directly with the construction company they could get discounts.
It’s not true! On the contrary. It is precisely the experienced broker who gets the advantages for the buyer from the construction companies.
In more than 20 years that I have been working in the real estate market of Miami and Orlando, and with a lot of emphasis on launches and new constructions, I can guarantee that the risk of dealing directly with the construction company or developer is very high. Why?
In this article I list 5 advantages (secrets) in hiring an experienced broker in launches and new constructions to guide you in the purchase of a property in Florida.
But first, it is essential to understand some characteristics of this new construction segment!
How a broker is paid in the pre construction segment
As in any real estate transaction, the broker will receive the commission for the sale of the property. This commission is paid by the construction company.
You may think that if you contact the construction company directly you would get a discount, in the amount of this commission that would be “saved” by the construction company, since there was no participation of a broker.
You will NOT get this discount!
This value is already considered as a commercial cost and is not discounted from the buyer.
In addition, there is another reason why construction companies do not grant discounts. Read more in the next topic!
Can I negotiate discounts when buying in pre construction?
The construction company obviously wants to sell its units at the highest possible price to increase its revenues.
But there is another strong reason that motivates construction companies not to grant discounts.
By keeping the price high, the construction company can sell the next unit for a similar or higher price. That is, the construction company creates a history of increasing prices gaining bargaining power with each new sale and, in this way, maximizes the revenue of a given launch.
In most releases the units are offered in phases!
Phase 1 is right at launch, with the disclosure of the first price list (first list). They are the cheapest prices of any launch and when it is possible to take advantage of the best opportunities.
When a certain number of units sold is reached, prices are adjusted and a second, more expensive price list is disclosed (Phase 2). The process continues, with prices being adjusted upwards, until the units run out, reaching what we call “sold-out”, when the enterprise is 100% sold.
By granting discounts, the construction company would be throwing the average price down and creating a transaction history that would go against its objectives.
They will avoid this situation with all their efforts!
Also consider that the real estate market in Florida is super heated. New launches are sold out very quickly. In a situation of very high demand, such as the one the market faces today, there is no reason to grant any discount.
What happens when you visit a construction company sales stand without the broker?
In more than 20 years working in the Florida real estate market, I often get this question: What happens if I visit the construction company’s sales stand without the presence of a broker?
In this situation, the sales agent, who represents the construction company, will probably ask you to fill out a form and register. And it is at this moment that you can miss one of the biggest advantages when buying a property on the plant in Florida.
Once registered in the construction company’s system without the presence of a broker, it is very likely that the construction company will no longer allow you to be represented by a broker for that specific release. At least, the broker who would accompany them in the future would not be entitled to the commission.
In this situation, very few brokers will be motivated to help you.
Do not sign any document or give contact information when visiting a sales stand of a launch. Always prefer to visit the stand with a broker you trust and has experience with the new construction segment.
5 Advantages of buying at the plant with the help of a broker in Florida
The benefits of having an experienced broker in Florida launches guiding you are numerous. Below are the 5 main ones:
1 – The broker knows the main construction companies and their reputations
A broker with long experience in the Florida real estate market knows the main construction companies and their reputations. This reason alone would be enough to never buy a new unit without the guidance of an experienced broker.
Years and years working in the day-to-day market allows the broker to cultivate a networking with professionals from the most diverse segments related to Real Estate in Florida.
When something goes wrong or some news arises in relation to a certain builder, we know quickly.
If a construction company does not have a good reputation or is not suitable, we know who they are. The same goes for good construction companies, with a great reputation. These are the ones we give preference to work and publicize the releases.
One of the biggest complaints in the new construction segment is the delivery of the unit after the promised deadline.
Building a building in Miami is not an easy task and the challenges are several. There are construction companies that are known for delivering the units on time, others may be late.
In addition to the issue of the deadline, there are several other problems that may arise before, during and after the delivery of the unit.
The broker’s opinion about a particular construction company is, in this way, fundamental!
2 – What is the best unit or the best batch?
Each launch, whether a condominium of apartments or houses, has more interesting lines or lots than others.
It is natural that the construction company wants to “push” the worst units or lots and, for this, will use great marketing tools.
And there is nothing strange in this posture of the construction company, after all, this is their business.
An experienced broker knows these market “arts” and can protect you from buying something that is not in your best interest.
The best unit of a building may not be the best investment if it is located in the worst “line”.
Line or “Line” in Florida buildings refer to the specific location of the apartment within the building, with respect to the view, orientation and exposure to sunlight. Each building can have several “lines” numbered or named according to its layout.
In house condominiums, a certain lot may seem charming on the plan and, in reality, hide several inconveniences that will impact the comfort and appreciation of the investment.
This is very common in condominiums of houses in Orlando, which offer Club-Houses and leisure infrastructure to owners and guests concentrated in a given area. In this situation, it is interesting to acquire houses not far from the leisure complex. Ideally, it would be interesting to be able to reach this complex on foot from your residence.
At the same time, depending on the layout of the houses and common areas, a lot may be too exposed to the traffic of people and inconvenient noises.
A broker with experience and traffic in the new construction segment knows this market niche “inside” and will know how to guide you in buying the best lot or the best unit.
3 – Upgrades and customization
Incentives are discounts or credits granted in the value of the house or in closing costs.
At the time of passing the deed there is a cost that varies from 2 to 5% of the value of the property. The construction company can pay this cost or grant a partial credit, in the form of an incentive.
Upgrade would be something related to the plan of the property and finishes.
At the time of purchase, there are plans that can be converted to offer a greater number of rooms or larger balconies. This type of upgrade must be defined at the time of purchase.
There are also design and finishing packages (number of sockets, type of granite or marble, etc.) that are offered at the time of sale. These packages can be optimized in the form of upgrade.
When there is a launch in Miami or Orlando, and it is a product that we consider interesting to promote to our customers and followers, we usually already know the construction company and the possible incentives or upgrades.
In other words, we already know how far it is possible to negotiate to get the maximum benefits to our customers.
A buyer who contacts the construction company directly will often not even know that there are these incentives or upgrades. Or, at best, they will not have the necessary knowledge to negotiate in their best interest.
4 – Document analysis
The purchase of a property involves a series of documents that require a lot of attention from the buyer and can be confusing, in addition to being laborious to gather all the papers and fill out forms.
The purchase at the plant still involves different documents, specific to this segment.
The broker will be able to guide you and ensure that all documents are in order and the forms are correctly filled out.
The broker will also guide you in the analysis of the purchase contract and ensure that what you are buying is what you are actually signing. Any problem, doubt or necessary negotiations, the broker will be present to represent you with the construction company.
The broker may also appoint lawyers specialized in the Florida real estate market, who can guide or even make additions to the contract, if necessary.
5 – An experienced professional representing your interests, not the interests of the seller (builder)
Being represented by a broker in the purchase of your property on the plant is to have the security of knowing that an experienced professional will work in your best interest.
As in any negotiation or debate, you need to have someone experienced to defend and protect you, in addition to providing the best advice.
Even after the purchase, your broker will be there to guide or defend you, in case unforeseen events arise, and it is necessary to complain or face the construction company.
A simple example is when a problem arises in the construction or finishes that is covered by the construction company’s warranty. Even in these situations your broker can be activated to represent you.
Do you want to buy a property in pre construction in Florida?
AMG International Realty is a global real estate company specialized in Florida and aimed at the foreign public. If you want to know more about the process of buying a furniture in Miami, Orlando or surrounding cities, contact me right now . My name is Heloisa Arazi and I have been working for more than 20 years in Florida: +1 305 318 6968.
