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Navigating New Construction Contracts in Florida: Tips for Real Estate Agents and Buyers

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Embarking on a journey to purchase a new construction property in Florida is an exciting venture for both real estate agents and buyers alike. However, amidst the thrill lies the crucial task of navigating the complexities of new construction contracts. To ensure a smooth and successful transaction, it’s essential to be aware of key considerations. Here’s what both real estate agents and buyers should watch out for:

Builder Reputation and Credentials

Before signing any contract, thoroughly research the builder’s reputation and credentials. Look into their past projects, customer reviews, and certifications. A reputable builder with a solid track record is more likely to deliver on promises and uphold quality standards.

Detailed Specifications

Pay close attention to the specifications outlined in the contract, including materials, finishes, and design elements. Ensure that they meet the buyers’ expectations and are clearly documented. Any deviations should be addressed and agreed upon before finalizing the contract.

Completion Timeline and Penalties

One of the most critical aspects of any new construction project is the timeline. Ensure that the contract specifies clear and realistic deadlines for different phases of construction, including completion dates for the entire project. Watch out for any clauses that allow for excessive delays without repercussions, as these can significantly impact buyers’ plans and finances.

Contingencies and Exit Clauses

Protect yourself with contingencies and exit clauses in the contract. These clauses allow buyers to back out of the deal under specific circumstances, such as failure to secure financing or issues with the property inspection. Having an exit strategy safeguards buyers from unforeseen complications.

Warranties and Guarantees

Verify that the contract includes comprehensive warranties and guarantees covering structural defects, mechanical systems, and workmanship. These protections offer peace of mind to buyers and demonstrate the builder’s commitment to quality and customer satisfaction. 

Payment Terms and Escrow

Clarify the payment terms and establish an escrow arrangement to protect buyers’ funds. Payments should be tied to specific milestones in the construction process, and funds should only be released when work is completed satisfactorily.

Change Orders and Extra Costs

New construction projects often encounter unforeseen circumstances or changes in plans that necessitate adjustments to the original contract. Pay close attention to how change orders are addressed in the contract, including the process for approving modifications and the associated costs. Buyers should always be aware of the potential for escalating expenses due to change orders and advise them to budget accordingly.

Legal Review:

It is highly beneficial for buyers to have the contract reviewed by a real estate attorney before signing. An attorney can identify any potential pitfalls or clauses that may not be in the buyer’s best interest.

Navigating new construction contracts in Florida requires careful attention to detail and

proactive communication between real estate agents and buyers. By addressing these crucial

considerations upfront, both parties can mitigate risks and ensure a successful transaction that 

culminates in the dream home becoming a reality. If you have any questions regarding new construction contracts, please do not hesitate to reach out to your trusted local real estate attorney. 


Cameron Allen, Esq.

Cameron Allen, Esq.

Cameron focuses his practice on residential and commercial real property transactions.

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