I am sitting on a JetBlue flight from LaGuardia to West Palm Beach as I write this blog post. Tomorrow, I will tour two new developments—South Flagler House and Shorecrest—both marketed by Corcoran Sunshine. I’ve always been fascinated by new development because every building injects energy and new life into a neighborhood.
As a new development expert, I have been through the process of planning a new building many times, from floor plan review to choosing amenities, finishes, and the subtle art of creating images that convey the soul of a building before it is built. It is a complicated, exciting, and collaborative process. Now, I am intensely curious about West Palm Beach. Will Palm Beach County be the most important county in the country, as Steve Ross, CEO and Chairman of Related, recently said? Based on all the buzz around West Palm Beach these days, it certainly seems like this visionary will turn his words into reality in short order.
If you are familiar with purchasing new development properties in NYC and now want to venture into the Palm Beach real estate market, here are five things to know.
You Are Likely to Buy Off a Floor Plan
You may never see the actual apartment you are purchasing until you are ready to close, which is true for both markets. Many developers start selling apartments two years before they are built. As a result, you are likely purchasing based on floor plans. You will visit a beautiful showroom where you can see a model kitchen and bathroom built out, along with samples of the windows and flooring. In larger buildings, there are likely to be drone shots of the view from your prospective apartment. There will also be a scale model of the building so you can see exactly where your apartment sits within it.
These visual aids are extremely helpful in envisioning your future home. I find that buyers who take the time to study the building’s website beforehand get more out of the on-site visit, as there is so much to absorb in one sitting.
In New York City, many developers wait until the building is fully constructed before selling apartments, depending on market trends and the size of the project. In Florida, this almost never happens because developers are unable to secure their construction loans until they have approximately 40% of the residences under contract. Only a developer with very deep pockets, who can afford to self-fund construction, will begin building before early marketing efforts take off.
The Offering Plan
In NYC, the Attorney General’s Office treats the purchase of a new development like an Initial Public Offering (IPO) for a stock. Developers must file an Offering Plan and receive approval before publicly announcing any apartments for sale. The plan outlines every detail of the development, and what is promised in it is what buyers should expect to receive.
The same applies to Florida new developments, with slight differences. While in NYC it is called an Offering Plan, in Florida, the equivalent documents are referred to as Condo Documents. Until the Offering Plan is accepted in NYC, it is rare for a sales office to begin soliciting interest. In Florida, however, it is common for sales offices to take reservations with a 10% down payment. These reservations are non-binding, and once the Condo Documents are approved, buyers can proceed to a signed contract that binds both parties to the sale.
Down Payments
When buying in Florida, expect to pay 40% of the purchase price upfront in installments. The timing of these payments varies and is typically tied to construction progress, but plan to have 10-20% in cash ready when signing the contract.
In New York City, you may end up putting down the same 40%, but it is common to find buildings that accept 20% or even 10% down for properties priced below $2 million. The threshold is lower in NYC because developers often secure construction loans long before sales begin, meaning you are likely purchasing when the building is only about a year from completion.
Contract Review
In both states, it is advisable to have an attorney review your purchase contract. While not required in Florida, it is highly recommended. In New York City, attorney review is standard practice. Though contract terms are largely non-negotiable, having a knowledgeable local attorney can ensure you receive as many protections as possible. It is crucial to hire an attorney who specializes in residential real estate within the state you are purchasing in—applying NYC legal principles to a Florida transaction (or vice versa) can create unnecessary complications.
Timing
Waiting for your new home to be built is a shared experience in both markets—exciting and frustrating in equal measure. One word of caution: avoid ordering custom furniture too early. Construction variances are normal and should be expected. I once had a buyer who ordered custom built-in furniture, only to find out that a planned cutout in a wall had been eliminated during construction. While the new design was an improvement, the custom furniture no longer fit as originally intended.
Closing dates are frequently pushed back, even for the most experienced and reputable developers. The estimated closing date is based on a construction schedule that assumes everything will go as planned. However, delays can arise from supply chain disruptions, weather conditions, and the administrative process of securing a Temporary Certificate of Occupancy and assigning tax lots—all of which can cause unexpected delays beyond the developer’s control.
The Walkthrough and Punch List
One of the greatest benefits of purchasing in a new development is having a brand-new home that no one has ever lived in. However, during your initial walkthrough, you may find imperfections. Unlike resale properties, which are typically sold “as is,” new development purchases allow you to compile a punch list of necessary fixes before closing. By the time you receive your keys, your new home should be flawless.
My career in new development began in 2001. As a newly licensed agent, I joined a team selling The Roebling Building in Tribeca. Since then, I have served as the sales director for several developments, including 148 East 24th Street, 106 West 116th Street, The Adeline in Central Harlem, and 1399 Park Avenue. Currently, I am an independent consultant at Claremont Hall, a Robert A.M. Stern-designed luxury residence in the heart of Morningside Heights—a distinguished addition to the Corcoran Sunshine portfolio.
Thinking of buying a new development in New York City or Florida? Ask me about it today.
