South Florida condo prices dip as some sellers try to get units with assessments off the books
New Florida laws have created new financial requirements for South Florida condo buildings, and that's led to more owners looking to get rid of their units.
David Paredes said he's bought a house in Miami-Dade County before, and said that buying his first condo could be just as complex.
"It's just as tricky," he said. "Sometimes even trickier depending on what you're getting yourself into. There's a little more homework to be done in the market."
Recent Florida state laws require condo associations to keep reserve funds and to conduct assessments on the building for repairs and maintenance, which can mean tens of thousands of dollars in added costs and fees levied on condo owners.
The laws were created after a 12-story condo building in Surfside collapsed in 2021 and killed 98 people.
"Pending sales are outpacing brand new listings coming out of the market and that suggests buyers are rushing in," Peter Zalewski said.
Zalewski studies the Miami condo market. He says this may be a good time to get a condo at a discount, since owners will lower the price to get condos with large assessments off their books.
"Sellers are heading for the exits," Zalewski said. "They're looking to unload and increasingly they're being forced to discount prices to get buyers off the couch."
Seller should take care of assessments before new owner buys condo, realtor recommends
Stefania Mogollon is Paredes' realtor.
She recommends that the seller take care of the assessments before a new owner buys the condo.
"Whether I'm on the buyer side or the seller's side, I always suggest for the seller to take care of it," Mogollon said.
She said condo owners can pay off their assessments by selling the condo, and then deducting the assessments from the sale.
"At the closing table when all the money is distributed, the first ones that are paid are the association and the bank," Mogollon said. "So, it comes out from the net of the sellers."
Paredes said he's considering buying in a building being converted into a condo building. He said even if he moves out of the condo, he can still keep it as an investment property.
"The market is very strong," Paredes said. "Resale is opportunity, but also rentability."
Mogollon said you may not always make a profit off selling your condo and it could depend on when you bought it.
She said if you bought it 30 years ago and renovated it, your condo likely has some equity. She said if you bought it during the boom a few years ago when prices were high, you may be selling it at a loss.