Navigating the Pre-Construction Deposit Process in Miami

The Pre-Construction Path

Purchasing a condo in a pre-construction development in neighborhoods like Brickell, Edgewater, or Downtown involves a different financial timeline than buying a finished unit. Because the building is still under construction, the payment structure is designed to align with the project's progress. This allows buyers to secure a unit early while managing capital over several years.

Note: This guide provides general information regarding the purchase process and is not legal, tax, or lending advice.

The Reservation Phase

The process typically begins with a reservation deposit. According to editorial guidelines, this initial deposit is usually refundable and serves to hold a specific unit while the formal purchase contract is being drafted. This step ensures the buyer has a dedicated unit while the legal paperwork is finalized.

Signing the Contract

Once the purchase contract is finalized and signed, the first non-refundable deposit is due. This amount is commonly around 10% of the total purchase price. This deposit secures the buyer's position in the project and is no longer refundable.

Construction Milestones

Following the initial contract deposit, additional payments are tied to specific construction milestones. These milestones are physical markers of progress, such as groundbreaking or "topping off" (when the structure reaches its full height). Each of these milestone payments is commonly around 10% of the purchase price.

While every developer establishes their own specific schedule, a frequently seen structure for these payments is summarized as 10/10/10/20, with the final 20% (or the remaining balance) due at closing. This staged approach means a buyer only needs a portion of the total purchase price during the construction phase, allowing for more flexible financial planning before the unit is delivered.

Understanding Escrow

In Florida, buyer deposits are generally required to be held in escrow rather than being spent freely by the developer. This provides a measure of protection for the buyer during the construction period. Escrow ensures that the funds are held by a third party until specific conditions of the contract are met.

Closing and Delivery

The final balance, which often represents 40% to 50% of the total purchase price, is due at the time of closing. This is when the unit is delivered and the buyer officially takes title.

Contract Review

Because the terms of these payments and the consequences of a default are governed by the specific purchase agreement, buyers should read the contract’s deposit and default terms carefully. It is recommended that buyers have an attorney review these documents before signing to ensure they understand the specific obligations of the contract.

To see current pre-construction opportunities in Omni, Midtown, and other areas, explore the available inventory at /developments.

Sources

Editorial - https://own.miami/