Buying a Preconstruction Condo in Miami: Deposits, Timelines, and Risk (2026)

Last updated: July 2026

Buying a preconstruction condo Miami buyers reserve today works differently from buying a resale unit. You are committing capital in stages to a unit that does not yet physically exist, against a delivery date that is often years away. The core mechanics: you place a small refundable reservation deposit, sign a purchase and sale agreement with a larger deposit at contract, then fund additional non-refundable deposits at construction milestones. In most Miami luxury towers, total deposits before closing run in the range of 40 to 50 percent of the purchase price, with the balance due at closing. [2]

Florida law does provide a specific protection layer. Under Florida Statute 718.202, a developer must place buyer payments up to 10 percent of the sale price into an escrow account until the unit is substantially complete. [1] Payments above that 10 percent can be released to the developer and spent on actual construction costs, which is the trade the market runs on. Understanding which of your dollars are protected, which are at work in the project, and what has to go right between reservation and closing is the entire underwriting question. This article is general information, not legal, tax, or financial advice.

The stages: from reservation to closing

A Miami preconstruction purchase moves through a predictable sequence.

Reservation stage

You start with a reservation agreement and a modest deposit, often in the low tens of thousands of dollars. [2] At this stage you are holding a spot in a specific line or unit type, not yet buying. Reservation deposits are typically refundable until you execute the formal purchase and sale agreement, and they are usually held in escrow. Read the reservation document for the exact refund terms rather than relying on a norm.

Contract stage

When the developer issues contracts, you sign the purchase and sale agreement and fund the first major deposit, commonly around 10 percent at contract, with many Miami programs structured so that roughly 20 percent is in by the time the contract deposit and an early tranche are combined. [2] Once you sign, Florida condominium law gives residential buyers a statutory rescission window after receiving the required condominium documents. After that window closes, your deposits generally become non-refundable except under the contract's own terms.

Construction milestone deposits

The defining feature of the model is milestone funding. A representative 2026 schedule looks like 10 percent at contract, another 10 percent at groundbreaking, another 10 percent at a mid-construction or top-off milestone, and a final pre-closing installment, building toward 40 percent or more before closing. [2] Ultra-luxury towers often push the total deposit toward 50 percent. [2] Each tranche is triggered by a construction event, so your capital is called over time rather than all at once.

Closing stage

Closing typically occurs after the building receives its certificate of occupancy. At closing you pay the remaining balance, frequently 50 to 60 percent of the price, in cash, financing, or a combination. [2] This is the moment financing and appraisal risk become real, which I cover below.

How Florida Statute 718.202 protects your deposit

Florida Statute 718.202 is the deposit-protection backbone. It requires a developer selling a not-yet-complete condominium to pay into an escrow account all buyer payments up to 10 percent of the sale price, held until construction is substantially complete. [1] Those escrowed funds can be released back to you if you properly terminate the contract under its terms or under Chapter 718. [1]

The part buyers often miss is what happens above that line. Payments in excess of 10 percent may be withdrawn by the developer once construction has begun and applied to actual costs of construction and development, including items like demolition, site clearing, permit and impact fees, and architectural and engineering fees tied to construction. [3] The statute specifically prohibits spending those funds on sales commissions, advertising, marketing, or loan fees. [3] In plain terms, the first 10 percent is a protected refund cushion, and the deposits above 10 percent are working capital funding the building.

The statute carries real teeth. A developer who willfully fails to establish or fund the required escrow account is guilty of a third-degree felony, and failure to establish or fund the account is prima facie evidence of an intentional violation. [3] That does not eliminate risk, but it explains why escrow compliance in Florida new development is generally taken seriously.

The timeline you are underwriting

Many Miami preconstruction purchases span roughly two to four years from reservation to closing. [4] Reservation to contract often takes three to six months, and vertical construction on a high-rise commonly runs 24 to 36 months. [4] For a buyer, that long horizon is both the opportunity and the risk. Your deposits are committed early against a market and an interest-rate environment you will actually close into years later.

If you are exploring specific submarkets while you wait for a project to break ground, our Brickell neighborhood overview and Miami Beach neighborhood overview give context on where new development is concentrated and how resale pricing behaves nearby.

A practical underwriting framework

Treat a preconstruction contract the way an investor underwrites a project, not the way a shopper picks a finished home. Work through these risks deliberately.

Construction and delivery delay

Delays are common and contracts usually give developers wide latitude on the outside delivery date. Model what a 6 to 18 month slip does to your plans, your rate lock, and any bridge you are counting on. Read the contract's outside date and force majeure language before you assume a delivery quarter.

Financing and appraisal at closing

You generally cannot lock a mortgage today for a unit delivering in three years. Lenders order an appraisal near closing and confirm the project meets condo eligibility rules, and that process can take six to twelve months to arrange. [4] Two exposures matter. First, the delivered unit must appraise at or above your contract price, or you cover the gap in cash. Second, you must still qualify at closing-era rates and terms. Underwrite the deal as if you may need to bring meaningful additional cash, and confirm early whether the building will be warrantable for conventional financing.

Assignment and flip restrictions

Many Miami developer contracts restrict or charge fees for assigning your contract before closing, which limits the strategy of selling the contract at a profit before delivery. If your thesis depends on assigning, get the assignment terms and fees in writing before you sign, not after.

Developer solvency and track record

Because your deposits above 10 percent fund construction, the developer's ability to finish is central. Review the developer's completed projects, their lender, and the escrow agent named in your documents. The 718.202 escrow protects the first 10 percent, not the full deposit, so sponsor quality carries the rest of the weight.

Closing costs and developer fees

Developer contracts frequently pass through costs that resale contracts do not, which can include developer or resort fees, contributions to reserves or working capital, and documentary and recording charges. Ask for a written estimate of buyer-side closing costs and developer fees so your all-in basis is not a surprise at the table.

If you want a second set of eyes on a specific contract and deposit schedule before you commit, that is exactly what a buyer consultation is for.

Frequently asked questions

How much deposit do I need for a preconstruction condo in Miami?

Expect total deposits before closing in the range of 40 to 50 percent of the purchase price in most luxury towers, funded in tranches from reservation through construction milestones, with the balance due at closing. [2] The exact schedule varies by project, so read the specific contract.

Are my preconstruction deposits refundable?

The reservation deposit is usually refundable until you sign the purchase and sale agreement, and Florida gives residential buyers a statutory rescission window after receiving the condominium documents. After that window, deposits are generally non-refundable except under the contract's terms or if you properly terminate under Chapter 718. [1]

What does Florida law require developers to do with my deposit?

Under Florida Statute 718.202, the developer must escrow payments up to 10 percent of the sale price until the unit is substantially complete. [1] Payments above 10 percent can be released and spent on actual construction costs, but not on sales commissions, advertising, or loan fees. [3]

How long does a Miami preconstruction purchase take?

Many purchases run about two to four years from reservation to closing, with reservation to contract taking three to six months and construction commonly running 24 to 36 months. [4]

What is the biggest risk buyers underestimate?

Financing and appraisal at closing. You commit today but qualify and appraise years later, so plan for the possibility of higher rates and an appraisal gap you may need to cover in cash. [4]

Gabriel

Sources

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Gabriel A. Moyers, PA. eXp Realty. Florida License #3407280. Equal Housing Opportunity. This article is general information as of July 2026 and is not legal, tax, or financial advice. Verify current figures against authoritative sources before acting.