Every week, we ask a real estate professional for their Short List, a collection of tips and recommendations on an essential topic in real estate.This week, we talked with Adriana Vargas Hernandez,
Due to the real estate crisis, cities as Miami have been transformed, re borned, laws and regulations were revised to protect our buyers and our developments from owners who would not pay their maintenance fees. We have more experienced buyers and less risks takers, we have a higher deposit structure that allowed our city to enjoy today’s more stable market, a more sophisticated buyer with better demands is willing to invest in our City, a better product with higher standards is being developed, and we have less developers who can not afford to play the game of development due to all of the above. Miami is simply at another level and category in the real estate world (Specially on pre-construction).
Of course, it is much more complex to sell pre-construction as you are selling a home that does not exist. Selling pre-construction is being able to sell the vision of a home today that will be built tomorrow. To some, this is the same as believing in fantasyland.
1. Keep the Client First – Unfortunately, the reality is that most Real Estate Agents sell pre construction because the commissions are much higher than selling an existing residence. Pre construction commissions may range from 5%-10%. As real estate agents, our priority is and should always be the buyer’s need. I highly encourage you to pay close attention to any pre construction project paying exorbitant commissions as 8%-10%, as it may be a sign of a problem with the development, or developer’s financial situation. At the end, the one paying for that exorbitant commission is the buyer. When a property is outstanding, you don’t need to give it away.
2. Understand Your Client’s Needs – My recommendation is that you ask all the right questions before you introduce a new project to your Buyer. Some of those questions may be: Location, timing, budget, HOA (maintenance fees), deposit in hand (most new developments require a 50% deposit), distance from work, schools of importance, expected amenities and services, size of building, expected kitchen and bathroom finishes, and lifestyle areas, shopping centers, and supermarkets.
3. Due Diligence – Once you have asked all the right questions, the next and most important step is to do your homework to protect your client: Who is behind the project? How many years of experience do they have? What projects have they designed and built in the past? Who is the interior designer? Is the Land owned, or do they have a loan? Take the time to visit every project in the area and prepare a list of pros and cons of every project including price per sq.ft.
It is a wonderful feeling when you deliver that brand new residence to your client. It’s even more rewarding when you are certain that you took all the precautions to provide the best service.
Since the early 2000s, Adriana Vargas Hernandez has been working in real estate, helping to sell more than $1 billion in real estate. Hernandez was recently named the Director of Sales of the One River Point development team.