Building or buying a New Construction Home in Miami? This is the ultimate Guide to New Home Construction, Remodeling or buying a ‘new build’
The ultimate guide for building or buying a new construction home in Miami
The cost to build new homes | The cost of home remodeling | Search land to build new homes | Success stories of new home construction in Miami
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What to Know Before Building a Miami Home or Buying a New Home in Miami?
There are a few aspects I would really like to mention for those looking for brand new homes in Miami. Of course you can buy a land and start building your own home. I have guided many clients in this process and I know the best developers and architects in town. Before you start constructing it is important to find the right team and to know the pitfalls about constructing a Miami home. Furthermore, building codes in the different neighborhoods can differ from one another. For example in the Grove you can build on 80% of the lot, while this is just 45% in Coral Gables.
Additionally, it is important to know that when you buy a home from a developer you mostly buy a spec home, not a custom home. A custom home is created with an end-user in mind. In 99% of the cases, these are very well-finished homes that are constructed for the end-user who designed this home from scratch and who will live in that home himself. Spec homes are homes developed by investors with the idea of selling them for a profit. As you can imagine the quality between these two might differ significantly as one is mostly designed to “flip” while the other is designed to achieve the highest quality of life. Do not confuse spec homes with custom homes, use an experienced agent to see the difference between the two!
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New Construction Homes Miami
Miami’s single-family homes market is bullish and so is the market for new construction homes. Like all good quality homes spec homes are being sold very fast and prices are about to increase. Because building a brand new home from scratch or buying a spec home is fairly different than buying a resale home we have listed the 4 things you as a buyer should know about buying a brand new home in 2020. (Source used: Inman News)
1. Working with an experienced agent
This one I have mentioned in numerous other blogs, but this is worth repeating as much as I can. Please use an experienced agent when you buy any type of pre-construction whether it is a home or a condo. Builders represent themselves and will not point out the property’s flaws, will not compare it to other properties and will not help you to get the best possible deal. They want to sell their property and do no have your best interest at heart.
I have worked with many contractors and builders (for clients as well as for myself) and I know their end-products. I also know which builders / contractors have a good name and which ones do not. I know how they work, communicate and how involved/flexible they are. I am familiar with the entire process of building a new home, what the pitfalls are, what the timelines are and last but not least I can distinguish a truly high-end finish from a standard finish. There is a difference between spec homes and custom homes and spec homes are often built as affordable as possible while they are being sold as a luxury product.
2. This is a sellers market with low inventory and rising prices
The Miami market is seeing a very low inventory and newly built homes are those that sell fastest. The favorable Florida Tax climate and the pandemic is leading to a large influx of buyers from high tax states. The pandemic has also led to a new reality in which people realize they need a home with an office, a larger home or a completely different lifestyle in general. Finally Low tax rates resulted in local buyers pulling the trigger.
Most of my buyers are looking for “newer homes” so if the general market is selling fast you can imagine how fast these new homes are selling. As a result of this tight inventory builders are increasing their asking prices or various buyers are bidding against each other. Those buyers who lock in on a deal today might get a significant appreciation before the home has even closed or has been built.
3. There is not a lot of room for negotiation
We know everyone is currently looking for a great deal. But please be aware that the Miami market is divided into condos and homes. Condos for sure are great for good deals at this moment, but homes are more and more becoming a sellers market with rising prices. Therefore there tends to be little room to negotiate. This doesn’t mean there are no discounts, but buyers need to be realistic. Sellers know they can sell to someone else so even though discounts can be given, there is a clear bottom line. Builders often use other incentives such as different options and upgrades as well as lower closing costs with use of one of their preferred lenders. Outside of those incentives, don’t expect there to be much wiggle room. Be aware that some homes might be built on less desirable lots or were custom built for end-users that did not come through. These kind of homes might have specific features that are not for everyone and this might lead to a better negotiation position although when reselling the next buyer will use the same reasons to lower the price.
4. Contingencies and timelines
Delays always happen and even more so with Covid-19. This is particularly true if you build from the ground up or if you purchase early in the process. Building materials and interior finishes like cabinets or flooring might take longer to arrive. Crews could potentially be challenged if someone gets sick. The process might not go exactly according to the initial projected plan. Allow yourself some float in case that happens, and plan accordingly with interim accommodations.
If you are planning to build from scratch, a builder might be a bit more flexible in doing a contingent contract for a limited amount of time, such as 60 days to find a buyer for the buyers’ property. The bottom line is, if you have to sell to buy, you really should have your home actively listed with a real estate agent before going under contract on new construction.
Remodeling a Miami Home
Some of my clients are looking for great remodel or construction opportunities, because of the resales opportunities or to increase their own quality of life. I have remodeled several homes myself, have guided many clients in this process and I am married to a renown Miami interior designer and architect. Contact me for more information about buying a fixer up property to remodel.
David’s current Coral Gables home has been completely renovated and expanded. See more ‘before and after’ pictures by clicking on the link to follow and read about the financial upsides of remodeling a Miami house.