Many of my buyers are current condo owners or renters who are ready to take advantage of the current low prices of home ownership in Miami Beach and are purchasing single family homes.  If you have never owned a home before, it’s a pretty big commitment.   Going from owning a condo where most maintenance issues are taken care of to owning a home where you are responsible for EVERYTHING.…can be a little daunting.

If you purchase a home on Miami Beach, most likely the cost of the home is going to be well over $500,000, plus taxes, insurance, maintenance and more.

My best piece of advice for my new home buyers is, don’t get overwhelmed, people buy homes every day.  Take it step by step.

One major thing many home buyers get caught up in is the home inspection.   Don’t get me wrong, I want my buyers to have the best inspection completed.  In fact I am an inspection freak.  I had a bad experience when I purchased a property some time ago and didn’t hire a good inspector.  I wouldn’t wish the aftermath on my worse enemy.  I have carried this experience into my profession with an iron sword and I insist that my clients hire the best of the best inspectors.

With that said, most Miami Beach houses are older homes.  Unless they have been completely gutted to the shell and rebuilt, the homes are going to be older.   Older Miami Beach houses require constant ongoing maintenance.  We live by the sea and the weather is a constant wear and tear.  Some homeowners are good at taking care of their properties, others are not.    You also have to take into consideration that some Miami Beach houses are vacation homes and are only used a few times during the year.  Some home owners have over the years hired A+  contractors, some C- contractors, while others did the DIY jobs.

When you have an inspection completed on a house for sale in Miami Beach,  nine times out of ten, the inspector is going to find something wrong with the property.   Think about it this way, you are hiring them to find the problems on the home and on the property,  if they don’t, they can be liable.  It’s their job and you are paying them to find everything that is wrong or could possibly go wrong with the property…….  and they are going to tell you this.

During the inspection period, you have to keep an open mind and be realistic about the situation.  For instance if you are buying a multimillion dollar luxury home on Miami Beach, a completely remodeled home and everything is expected to perfect; A+ craftsmanship, top of the line appliances and more…..  then of course a bad inspection report would possibly make the property less appealing and possibly no longer a good purchase.  However if you are purchasing a less updated house for sale in Miami Beach, a property at the bottom of the market in terms of price and it hasn’t had recent updates, than an inspection report with some issues, is most likely to be anticipated.

Your job as the buyer is to determine if the property with any inspection issues is still worth the cost of purchasing that property.  You also have to think about the cost of the repairs and if this purchase still makes sense.

The most important thing to remember during the inspection period is to remain level headed and to try not to get emotional.  If the property is an older house for sale in Miami Beach, issues will most likely reveal themselves during the inspection period, expect this.  You as the buyer need to weigh the pros and cons of these issues and decide if the property is still a good buy.   How you resolve and negotiate these issues, ultimately depends on your sales contract and your agent.

Just remember houses for sale in Miami Beach are now at lower prices than we have seen in previous years.  If you are thinking about buying a home in Miami Beach, take it step by step and don’t get freaked out during the inspection period.  You have to keep it all relative.

Read what previous clients said about Jamey & Ognjen Prezzi’s services.
Call us today:  305-793-8965  Email me:  jameyprezzi at gmail.com

Copyright © By Jamey Prezzi 2010 * All Rights Reserved*House for sale in Miami Beach

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Honestly this question is pretty difficult to answer until you really know two things:  (1) Your overall price point and the type of property you can afford to purchase & (2) What’s actually included in the monthly condo fees.

For instance many of the first time buyers for the luxury condos on Miami Beach may be surprised when they see maintenance running in the $1000s per month price point.  But you have to consider what you actually get for your money.

Today I am going to focus on (2) What’s actually included in the monthly condos fees.

1.  Is the property self managed or is a property manager on site? In most of the luxury condos on Miami Beach the property management is on-site.  This often includes a main property manager, assistant and then a staff of maintenance crew.  Personally I feel that unless the building is super small, an on-site property manager is the only way to go.  There are some mid size buildings in Miami Beach that are not small enough to be self managed but not large enough to have on-site management and honestly the overall organization and care of some of these buildings is not so good.  So although on-site management may at first seem a little more expensive, over the long term you may find that it’s well worth the cost.

2.  How much of the maintenance goes towards reserves? The reserve topic is often a very controversial topic in Miami Beach. Reserves are extra monies collected on top of regular maintenance fees that go into a special account to use for emergencies, maintenance issues and (other items).

Reserves when approved the by the building’s owners and board can be used to cover maintenance issues, delinquencies and more.   There’s a mentality that reserves are just a “happy” account sitting around to be spent at any board’s wish, however reserves are much more than than a fat cow account

In the past many buildings in attempt to keep the monthly condo fees low, didn’t collect reserves at all or not enough.   If you look at many of our issues over the most recent years:  huge assessments running into the thousands of dollars per unit and delinquent owners…..  If buildings had been properly collecting reserves over the past thirty years or so, current owners wouldn’t be as burdened with current maintenance and budget deficiencies.  Thus throwing some buildings now into major financial difficulty.  In today’s market, if you need to get a loan, most lenders will require that the building you are purchasing in to have proper reserves and a monthly collection of reserves.

A little example of how reserves can be a good thing.   There is one really popular building that I know of that has really turned around their financial situation by being super aggressive with their reserves and delinquent owner situation.  On top of their regular maintenance they collect 20% reserves.  This has in effect allowed them to almost recover from a large deficiency from bad paying owners, almost pay off a large construction loan and now buyers can get lending in the building.

So in this really bad market, this building has managed to almost recover. Yes the monthly maintenance is a little more but I know many of my buyers would prefer to pay a little more knowing that they are buying into a more financially sound building.

3.  What services are included in the monthly maintenance? Many of the luxury ocean front condos on Miami Beach have super deluxe services.  From umbrella, chair and towel service on the beach to tight roaming 24 hour security and more.  What type of services do you expect?  Of course the more amenities and heightened service that is provided, the more you will be expected to pay for the monthly maintenance.

So these are just a few basic items to consider and I could go on and on regarding this subject but the key thing to know when purchasing condos on Miami Beach is not automatically judge the number by the number.  Maintenance fees are more than just a number and although it may be a little higher, it may be a better deal in the long run.

Copyright © By Jamey Prezzi 2010 * All Rights Reserved* Condos on Miami Beach

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If you are looking for Luxury homes in Miami Beach, Luxury Condos in Miami Beach or Miami Beach Condo Foreclosures, browse through the site because we have included all of this information for you

We know the Miami Beach Luxury Real Estate market.

Jamey and Ognjen Prezzi service the areas of:  South of Fifth Miami Beach, Venetian Islands, Sunset Islands Miami Beach, Millionaires Row Miami Beach & Luxury Condos in Miami Beach like Continuum I, Continuum II, Portofino Towers, Apogee, Murano at Portofino, Murano Grande, ICON South Beach, Bentley Bay, Il Vilaggio, The Setai, The W, Capri, The Caribbean, Mosaic, MEI, Akoya, Blue Diamond, Green Diamond and more.

More about Miami Beach Real Estate

Miami Beach is an island off the Miami Mainland that stretches north to south from 1st street up to approximately 87th street and east to west from the Atlantic Ocean to Biscayne Bay.

The real estate that is on Miami Beach is vast.  There are high rise condominiums, low rise condominiums, single family homes, town-homes and mansions.

One thing that is very important for buyers to know is….

When the media and other real estate statistics group all of Miami real estate into one big lump, unfortunately the numbers don’t really tell the entire truth.  Miami and Miami Beach are two different areas.

South Beach, Brickell, Downtown Miami & Midtown Miami are three different areas within the general “Miami” area and from there each individual building has it’s very own market data.  Miami Beach also has many different neighborhoods and within each of these neighborhoods are even more sub markets.

What’s most important to understand is that Miami Beach, although a local residence for many, is also a second home for others.  It is a very desirable place for people to buy second homes as well as invest their money.  Our real estate market although local, is not always driven by “locals”, many of our buyers are from wealthy countries and they have no problem paying cash for a multimillion dollar property on the ocean.

Miami Beach has many different neighborhoods.  Some neighborhoods are “designated” while others are “made up nicknames” by locals over the years.

From south to north some of the most popular Miami Beach neighborhoods are:

• South Beach or SOBE is from approximately 23rd street to first street and from the Ocean to the bay.
• South of Fifth or SOFI (still located in South Beach) is from 5th street to 1st street and from the Atlantic Ocean to the Biscayne Bay is South of Fifth South of Fifth or (SOFI).  This neighborhood is one of the high end luxury neighborhoods of Miami Beach featuring buildings like Continuum I, Continuum II, Portofino Towers, Apogee, Murano at Portofino, Murano Grande, ICON, South of Fifth,  Bentley Beach, The Courts & Cosmopolitan.
• Star, Palm and Hibiscus Islands: These are the three islands with large mansions that you can view from the MacArthur Causeway.  They are artificial islands and were created by Carl Fisher.  These islands are homes to many wealthy residents and celebrities.
• Venetian Islands: Also artificial islands and encompass:  Biscayne Island, San Marco, San Marino, Di Lido, Rivo Alto and Belle Island.  Belle Island is the most eastern Island of the Venetian Islands and has condominium high rises and also features The Standard hotel and Spa.  Rivo Alto, Di Lido and San Marino feature single family homes.  Biscayne Island has a mixture of single family homes and condominiums.
• West Avenue/Bay Road
• Flamingo/Lummus
• Sunset Islands
• Mid Beach/Millionaire’s Row
• Nautilus
• Alllison Island
• Biscayne Point
• Normandy Shores

Although all of Miami Beach is fairly “pedestrian friendly”, the most “urban/pedestrian” area of Miami Beach is South Beach.  South Beach is the “main attraction” of Miami Beach and features the most famous spaces, restaurants and clubs like: Lincoln Road, Washington Avenue, Ocean Drive, Prime 112, The Meat Market, Mansion,  Sushi Samba &  Joe’s Stone Crabs.

South Beach is truly a little mini city in Miami Beach.  It’s a lifestyle like no other which is what draws so many people to live in this area specifically.

Mid Beach and the islands are a little more residential and low key.  Although these areas are still within minutes to South Beach and are still very urban compared to other beach towns, these areas feature more single family homes and large high rises.  Many of the high rises have full service amenities featuring restaurants, spas and amenities that allow the residents to “live inside” the building.

One thing that about Miami Beach that most people do not know is that it really has something to offer everyone from local year round residents, tourists, investors, vacation home buyers and more.  We have beaches, nightclubs, restaurants, shopping, local parks that Miami Beach residents can access for free (hockey, pool, after school activities and more), boating, retiree friendly activities and so much more.  Miami Beach is often referred to as a “party town” and although we definitely have our fair share of parties, we are so much more than a big party.  It’s a huge diverse community of people and a great one at that!

We are always just a phone call or email away and will be more than happy to assist you with renting, buying or selling in Miami Beach.

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It’s also one reason years later that we decided when we started our business we would make it our goal to offer a different experience.

Here’s the thing (and you know I am going to say it), every profession offers good and bad experiences.  Just like when you go out to dinner at the newest most fabulous restaurant, you may have a good experience or you may have a bad experience.  But if you have one bad experience are you never going out to dinner again?  Probably not.

Of course in Real Estate the price point is much higher and there is more of a long term association with the purchase.  One you may have to live in for years and pay on for years, thus more time to stew and be reminded of the bad experience.

In the end, you may find yourself with the need to purchase another property and this one bad experience probably doesn’t eliminate the need for a valuable consultant; one who can advise you on the market, assist you along in the purchase and help you complete the transaction of purchasing real estate.

Pre-Qualifying our buyers is our number one service to our buyers and unfortunately we may loose some buyers due to the intense pre-qualification process that we have implemented.  Many buyers are not used to answering so many questions in advance and often get a little turned off with the process.  We have tried many ways to change around, eliminate or reword this process but unfortunately it all comes down to a few standard questions that are pretty intrusive for a first meeting.  I get it, I understand.

Looking from the outside in, I may be a little turned off by some of the questions too.   But knowing my business inside and out, I wouldn’t be doing our buyers a service by asking any less.

So what are some of the most important questions we ask and why?

1.  Full & correct contact information and purchaser (s) names, numbers, etc. I have paperwork required by my broker that needs to be completed prior to showing properties.  Agents rarely work with sellers without  a listing agreement, we offer the same service to our buyers.  We allow our buyers to cancel the contract if they are not happy with our services but at the very least it demonstrates our obligations to our buyer.  Isn’t that important?

2.  How are you planning to purchase the property?  Cash or financing? Although this is one of the most annoying questions for new buyers who call us, it’s probably one of the most important questions in our specific market.

-Some buildings are not lendable at this time.  Meaning if you need to finance the purchase, you may not be able to purchase in many of the buildings in our area.  The reason is because the building doesn’t meet the qualifications of the lender’s standards.  Unfortunately there are many buildings like this in our market today and I would say it’s more of a majority rather than minority.  If you need financing, do you really want me showing you a ton of properties that you cannot even purchase?

-In today’s market when submitting an offer, the seller’s agent usually requires  proof of cash funds or a pre-approval letter with the offer.  In the past I have had clients wait to get this documentation at the last minute and then it takes so long that they loose the opportunity to buy.

-After I get a pre-approval letter from my client, I call the mortgage broker and/or lender contact to discuss the terms of the pre-approval to be sure that I am showing properties that meet the pre-approval’s standards.

-Many of our buyers initially are not aware of the large down payment that needs to be made in today’s market (ask your lender).

-For the cash buyers.  No worries, just send in proof of funds.  I don’t need bank account numbers or personal data, just a letter from your bank.  **I don’t mean to be rude on this one  but I have a lot of people call me every day saying that they are “cash buyers”, unfortunately many are not.  They ask me to look up hundreds of properties, give opinions and market research.  If I did this every time someone called, I would literally be doing it all day and eventually be out of business.  So please, just call the bank, ask for the letter and I will more than happy to provide you with all of the data you need.

3.  Are you already working with another agent? Although I am well aware that some agents do not abide by this ethical rule, I ask it because we do.   Doesn’t that say something about our character?  Don’t you want someone who does the right thing to be working on your side?   We all have access to the same database.  We work one on one with our buyers and expect our buyers to do the same.  In the end if you are not happy, fire us.

Wrapping it up…

The main reason why I felt I needed to write this post is because lately I have had a lot of buyer inquiries and I am very grateful for them.  However, I have been in a little bit of a rock in a hard place because on one hand I love my job, I know the market and I want to answer every question that they have for us.  On the other hand, I really cannot start working with a client in good faith until the pre-qualification stage is completed.  Usually that means I am often waiting for the final piece,  the pre-approval letter or proof of funds.

I am well aware that we may loose or annoy some buyers in the process, I wish that weren’t true but it is.

What I wish more buyers would recognize from what I feel and from what I have heard other agents say , is that your agent will be much more comfortable and eager to work with you if you can commit to them and provide them with the information that they have requested.   Some agents are just too timid to ask and confirm these details because they are scared that they will loose a potential buyer.  They end up driving all over town showing properties to unqualified buyers or unqualified properties to qualified buyers and then the overall experience usually leaves a bad impression.

Thus the “circle of negativity” that surrounds our profession.  Good agents ask the right questions and ask for the right documentation before ever showing property to a client.  That’s our job.  So don’t get annoyed when the agent you contact is asking for a lot of information up front, that’s usually a good sign that they know what they are doing.

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Miami Beach Real Estate Terms 101, (hint, hint…..  they don’t know what you are talking about).

I was reading a blog article earlier this morning and the author was saying that often when you do something for a living, those outside of that sphere who don’t do it daily, probably have no idea what you are talking about.

It’s an interesting read, you can read the full post here.

It got me thinking a little about the terms that I may use with my customers and clients on a daily basis.  I figured I should go through a few of the most common terms I use on a daily basis and explain them.

• Listings: A term we use to describe the properties we as agents list for sale or rent.  For example, “Are there any two bedroom listings for sale in Mosaic Condos?”
• Pocket Listing: A term used to describe a listing that is not active on the MLS but an agent knows that the owner would sell it if they had the right buyer.
• Escrow:  the literal translation is “an account established by a broker for the purpose of holding funds until termination of a transaction via wikipedia“  In plain English:  when you give a check for a deposit, I will give it to a broker or an attorney who puts it into an account to hold until the sale is completed and/or the 1st day of the rental.  This account is often used for reference during the transaction to send out letters stating that the funds have cleared and there is a deposit of $xyz amount and it is valid.
  
  
• Fannie Mae Approved:  This could be a big long explanation but basically Fannie Mae buys loans from approved mortgage sellers.  In order for Fannie Mae to buy the loans back, they have to be based on certain criteria.  So when a building is listed as “Fannie Mae Approved”, this means that the building meets the criteria of Fannie Mae thus you can more easily get a loan on a unit in this building.  **Everything still has to be reviewed and finally approved but it’s a good indicator that you can look to buy in this particular building if you need a loan that is back by Fannie.
• Listing/Seller’s Agent/ Owner’s Agent:  This is the real estate agent who represents the owner/seller of the property.
• MLS:  The multiple listing service.  This is a computer database where we enter our properties for sale and for rent.  From here this information gets syndicated to sites like Realtor.com, Zillow, Googlebase and more.

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Are there good deals in Miami Beach Real Estate?

Absolutely but you have to remember that people from all of the world want to live here.  It’s a very International city, so although typical local US residents in Miami Beach (& around the US) may be in a slump with buying power, we have many other buyers around the world who are able to buy into our market and often they buy with cash.   Now I am seeing many more Americans & Canadians coming back into our market place to buy.

The best way to gauge what you can get for your money is look at closed sales.

Although Miami Beach may be a very small area,  there are quite a few different markets going on inside of it.  There are many different ways you could break down the Miami Beach Real Estate market so I am going to give a few different variations here…

Let’s use for instance the zipcode of 33139 from about 23rd street down to 1st and east over to the Star Islands and Venetian Islands. I am only going to go back 90 days.

Over the last 90 days in this area there were 209 condo/townhomes that sold.  Below is a snap shot of a map of a few of those properties that sold.

I am going to use one of the most common request that buyers call and request.

Scenario

1 bedroom, 1 parking space & a water view

There were approximately 24  properties that sold with this criteria over the last 90 days.  4 were short sales, 1 was a foreclosure and 19 were regular sales.  The final sales prices were from $135, 000 to $855,000.

See the variation?

The property that sold at $135,000 was a 650 square foot 1964 property located on West Avenue.

The property that sold for $855,000 is located in The Continuum, located at 100 South Pointe Drive in the South of Fifth area in South beach. It is also in a building that was built in 2002 and has 1365 square feet.

Price variations in Miami Beach can be based on many factors, a few of the most important are:

1.  Location

2.  Year built

3.  View (literally some buildings have two different markets inside of them based only on the views).

4.  Amenities:  Parking, conceirge, security, pool (& you can go from just a pool to extra pool services like towel service), beach service (chairs & umbrellas for owners), security and more.

5.  Built in furniture quality and appliances

6.  Floor of unit (higher floor typically = more $$$)

7.  Reputation

8.  Privacy

9.  Size

10.  and more….

The main thing that I think that is important for buyers to do prior to previewing property in Miami Beach is to first get a firm grasp on what you can get for your money.  If not buying with cash, first speak to a lender and find out how much you can afford and then have an agent start sending you listings based on that price point.  If buying cash, obviously the budget of the cash purchase will determine your buying power and from there have an agent start sending you listings based on this budget.

There are many options for buyers in Miami Beach but it’s important to remember that although the market is down, we are still a highly sought after place to live (or have second homes) both in the US and Internationally.

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Steps to Purchasing a Property in Miami & Miami Beach

1.  Analyze Your Needs in a Consultation

Some things to consider:

• Is this for primary residence or do you plan to rent it out?   Not all properties/buildings in Miami allow renting, short term rentals.
• Will their be pets in the home?  Some neighborhoods/buildings have pet restrictions.
• Do you need a parking spot?  Do you have a second car, where will you park that car?
• Do you want to buy in an older building or newer building.  Older buildings may have up coming certifications that can create expensive assessments.  Newer buildings may have pending assessments but based on other reasons.
• Can you carry an extra assessment on top of regular HOA dues and other fees if it were passed?

2.  Obtain Financial Pre-Qualification and Pre-Approval

Some things to consider:

• If you are planning to purchase by cash, the process will be much different in terms of applications and mortgage contingencies.
• If you are planning to purchase with financing and you want to purchase a condo, you need to speak with your lender about which buildings will qualify to buy with financing (because most in this area do not) & how much money do you need to put down?

3.  Select Properties

4.  View Properties

5.  Write an offer to Purchase  > Earnest money deposit

6.  Negotiate and counter offer.

7.  Accept the Contract > Inspections > (if condo read condo docs/building financial documents, etc.) > Remove contingencies

*****  If you are purchasing a condo you will also need to go through the condo application process.  This may or may not include an in person board interview with the current condo board of the building.

8.  Complete the Mortgage Application* > Credit Report > Appraisal > Verifications

9.  Rejection? > Secure Underwriting > Conditions

10. Obtain Loan Approval*

11.  Schedule Termite & Survey

12.  Contact Title Company > Title Exam & Insurance

13.  Close on the Property

14.  Take possession of your new home

**every purchase and the deal can be negotiated and prepared differently but these are the typical steps to anticipate

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Where are the homes in Miami Beach?

If you are not from Miami Beach and are only traveling around by taxi or on the “tourist” destination you may be surprised to find that we have some really great neighborhoods tucked away off the “tourist” beaten path but still very “accessible” for the Miami Beach lifestyle.

Currently listed in Miami Beach are 388 Single Family Homes for Sale.

Some of the best ways to search for homes in Miami Beach is by zip code.

In the 33139 zip code of Miami Beach there are currently 103 homes for sale.  The least expensive property is listed at $449,000 while the most expensive is at $24 million.  We can talk “listing prices” all day but the cold hard facts are what sold over the last six months or so.  Over the last six months in 33139 there was only one sale at $500,000 or less, another sold at $890,000 and the rest sold for $1.8 million plus.

In the 33140 zip code of Miami Beach there are currently 180 homes for sale.  The least expensive property is listed at $375,000 while the most expensive is at $29.9  million.  Over the last six months in 33140 there were 51 sales in this zip code.   Properties sold from $9.5 million to $280,000.

In the 33141 zip code of Miami Beach there are currently 99 homes for sale.  The least expensive property is listed at $159,900 while the most expensive is at $13.5  million.  Over the last six months in 33141 there were 29 sales in this zip code.   Properties sold from $9.5 million to $141,750.

What are the huge variances in sold prices?

• Waterfront versus non-waterfront property
• General location (some areas are more exclusive than others)
• Renovations/Upgrades
• Some of the upgrades can be as large as impact windows, generators and more.
• other factors too.

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On Friday I posted a link to breaking news on my Miami City Diggs fanpage on Facebook that Fannie Mae announced that they were going to ease condo mortgage restrictions.

The article published by Florida Association of Realtors noted that:
Fannie Mae announced yesterday that it would comprehensively review hundreds of condominium projects in Florida. Through a new “Special Approval” designation, Fannie hopes to streamline mortgage approvals for projects that don’t currently fit Fannie Mae guidelines even though they present limited risk to the company.

published on FAR click here to see the full article

In this market, this is good news to start off the new year… why?

When we start working with new buyers the most challenging part of the pre-buying process is explaining to our buyers that if they are purchasing a property and need financing; unfortunately not all of the properties listed for sale, will be properties that they will be eligible to buy.   I just looked up in the MLS the most recent closing data of condos sold in Miami Beach for 2009.  There were 1560 properties sold and 1095 of those were purchased with cash.  Now that doesn’t mean that all of these were units/buildings didn’t qualify for financing, however it is a telling sign of this market.

Breaking it down…

Let’s assume that you want to buy a Miami Beach condo and you come to me with a pre-approval letter from your lender.  However, just because you are pre-approved doesn’t mean that the building that you want to purchase a unit in is approved for lending.

Due to the hardships that our market has faced over the last few years, Fannie Mae has gotten very strict on their lending restrictions and they have have created a set of guidelines that lenders must go by in order to approve a unit in a building before backing a loan.  This means that if the building doesn’t meet these criteria, most often the loan will not be approved.

According to Fannie Mae, the guidelines can be modified for condo projects on a case-by-case basis. Therefore, these guidelines may not apply to all condo projects.  These are some examples of what may be considered:

• No more than 15% of a condo project units can be more than 30 days delinquent on HOA dues. This is an existing guideline that is now being applied to new condo projects. The calculation was also changed from being 15% of HOA fee payments to 15% of total units.
• Fidelity insurance will be required for condos with 20 or more units, ensuring that homeowner association funds are protected. Presently, this requirement applies to new projects and is now being extended to include established condos.
• A requirement that borrowers must now obtain a condo-owners insurance policy unless the master policy provides interior unit coverage; coverage may not be less than 20% of the assessed value. A condo-owners policy, known as an HO-6 policy, covers personal property, personal liability, and the physical unit from the studs and in. Many policies also include special assessment coverage or the option to include a special assessment coverage rider.
• No more than 10% of a project can be owned by a single entity.
• No more than 20% of a project can consist of non-residential space.
• The homeowners association must have at least 10% of its budgeted income designated for replacement reserves and adequate funds budgeted for the insurance deductible.

So what does this mean now?

Note the above criteria and add in the announcement last week from Fannie Mae that they “would comprehensively review hundreds of condominium projects in Florida.  Through a new “Special Approval” designation, Fannie hopes to streamline mortgage approvals for projects that don’t currently fit Fannie Mae guidelines even though they present limited risk to the company.”  quoted from FAR article

If you want to see all of the FAQ pertaining to this new announcement click here.

This means that many previous buildings that were not eligible for certain financing based on previous restrictions, will now have a new opportunity for review.  Thus a better chance for non-cash buyers to purchase in some of these buildings and in general more buildings that will may be eligible for financing.

from Fannie Mae’s site:  Special Approval Designation for Established Florida Condominium Projects from 01/04/09

I have only listed buildings from the areas that we work.
To see the full list click here.

Miami Beach:

360 Condominium A & B
Harbour House
Mirador 1000 & 1200
Roney Palace
The Grandview Palace
The Michelle Condominium

Miami:

Blue
Charter Club
Cite
Latitude on the River
The Club at Brickell Bay Plaza
The Grand
The Yorker

This is really good news for non-cash buyers and hopefully it will open up more buying opportunities for them.  Now more than ever buyers need to be sure they are working with professionals (lenders and Realtors) who know this market inside and out.

Thanks to Marc Halpern at Halpern & Associates for providing me with these details.  Marc Halpern is associated with the Keller Williams Miami Beach office, he knows our market and he comes highly recommended.

Marc Halpern
Halpern & Associates Mortgage Corporation
1680 Michigan Ave #1001
Miami Beach, FL 33139
O) 305-535-2230
F) 305-535-2231
C) 305-992-4325

DISCLAIMER: This information is presented to provide an overview of Fannie Mae’s condo guideline changes. For specific information and questions, please consult with your mortgage loan officer.  I am not a mortgage loan officer, I am a Realtor that works with buyers and sellers in a challenging market.  My goal is to provide my clients with the most up to date information.  This is information that is more suited for your lender to assist you and the extra details they are best suited to answer those questions.

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