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Destin Preconstruction Condos for Sale
Why and How to buy Destin Pre-Construction Condos
If you would like to be kept informed of Destin Preconstruction Condos as they become available, please fill out the form at the bottom of this page.
Why purchase Destin Preconstruction Condos?
With pre-construction the leverage that you have is on the Purchase Price.
Example: $500,000 Destin Preconstruction Condo Price
10% down $50,000 cash along with a 10% Letter of Credit
Appreciation at 10% on $500,000 is $50,000 each year .two years to build would be a $50,000 increase. A gain of $100,000 or 200% increase on your cash, if you sold the property for $600,000 yourself.
Realistically we have had an appreciation on Gulf Front property of 20% to 30% for the last 16 years. This gives a much higher return. This trend cannot be guaranteed, however, this is what is presently occurring on the Emerald Coast. The sales prices of $500 per square foot in our area are still well under other Resort areas, such as South Florida with prices at $700 - $1200 per square foot or more.
How It Works
Destin preconstruction condos prices are generally lower than those of existing condominium resales. This brings up two obvious questions:
1) Why do developers discount the units for pre-construction buyers?
2) Why do they sell pre-construction rather than build first?
The answer to both questions is the same - - they have to.
The prices are discounted to give buyers the incentive to buy something they can't see, touch or feel. Sky and paper are harder to sell than concrete and steel. Discounts make the difference. Developers sell Destin preconstruction condos, even at the lower prices, because they must have pre-sales to get their construction loan. Lenders may require 50-80% of a project to be sold before construction can begin.
The Four Phases of Preconstruction Sales
1) Reservation Agreement--The developer has preliminary plans for the project that are subject to change and buyers can make "intent to buy" reservations with a deposit of $5,000-$7,500. This deposit goes into an interest bearing bank trust account, and the buyers can get a refund plus interest at anytime. There is no risk.
2) Right-of-Rescission Period (15days)--The buyer receives the state approved finalized condominium documents and hard contract to review for fifteen days. The buyer then needs to decide whether to go ahead with the purchase or get a refund.
3) Contract for Sale--This is when the hard contract is signed and becomes binding for both parties. The buyer pays the balance of the required earnest money, which is usually 20%. This can be paid with 10% cash and 10% Letter of Credit from the individual's bank. If enough of the Reservation Agreements convert into hard contracts, the Developer will then be able to get the construction loan.
4) Closing--The condominium is completed and a Certificate of Occupancy is issued. The buyer performs a walk-through inspection and goes to closing. This is when the remaining balance and closing costs are paid. This is the happy day when the buyer gets to move in.
In any investment, it is important to plan and remain patient. Plan to have the necessary funds when it's time to close and the patience for the building to be completed. A recently completed beachfront condominium shows just how well planning and patience pay off. In the pre-construction phase, units were selling in the $200,000 range. Once the project was completed, the units were selling in the $300,000 range. There is a great probability that you too will enjoy such a substantial appreciation for your patience.
Destin Preconstruction Condos for Sale
Destin Preconstruction Condos for Sale
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