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The #1 Mistake Buyers Make When Purchasing a Condo in Miami
As a Realtor who has helped many buyers purchase condos in Miami, I’ve seen one mistake happen far too often. This mistake can cost thousands of dollars, weeks of time, and sometimes even the entire deal. Beyond the financial risks, it often leads to frustration, emotional stress, and disappointment.
The mistake? Trusting your bank or a non-local lender / mortgage broker to finance your condo in Miami.
Many buyers get a pre-approval and feel confident their loan will go through smoothly. Their lender / mortgage broker sounds very reassuring, often telling them repeatedly throughout the process:
“Everything is going great.”
“Your loan is fully on track.”
“There are no issues; we expect a clear to close very soon.”
Sometimes this reassurance continues even after the initial loan approval is given, encouraging buyers to feel secure in their purchase.
But the reality is that many lenders / mortgage brokers don’t fully understand Miami condo financing. They may give these reassurances prematurely.
Then, very late, sometimes days before closing, or even at the closing table, the loan is suddenly denied.
Miami Condos Are a Different Animal
When financing a condo, lenders / mortgage brokers don’t just approve the buyer, they also have to approve the building. This means the condo association’s finances, occupancy ratios, legal issues, insurance, and maintenance all come under scrutiny.
Key things lenders review include:
Percentage of owner-occupied units
Reserve funds and budget health
Pending litigation or legal claims
Special assessments or structural concerns
Building insurance coverages
Miami has many buildings that are considered borderline or “non-warrantable” under Fannie Mae and Freddie Mac guidelines. Even some warrantable buildings get denied because the lender / mortgage broker doesn’t know how to correctly handle the condo documents.
I’ve Seen It Happen Too Many Times
I’ve worked with buyers who were reassured by their lenders / mortgage brokers every step of the way, through appraisal, underwriting, and even after the initial approval.
They were told repeatedly that everything was on track and that closing was just a formality.
Then, very late in the process, often when the buyer least expects it, the loan is denied.
This leaves buyers shocked, stressed, and sometimes financially exposed.
By that time, buyers have already spent money on:
Appraisal: $600 – $700
Home inspection: $300 – $450
Condo questionnaire fee: $300 – $450 (or more)
Condo application and admin fees: $100 – $500 (varies by building)
Deposit/earnest money: Usually around 5% of the purchase price
If the financing contingency deadline passes without approval, buyers risk losing their deposit unless properly protected by their Realtor or attorney.
What Happens Next?
Sometimes, sellers agree to extend the loan approval period, giving buyers a chance to switch to a knowledgeable local lender / mortgage broker. But that means:
Paying for another appraisal
Paying for another condo questionnaire
Delays in closing
Added stress and uncertainty
In some cases, it’s simply too late to save the deal.
How to Avoid This Costly and Stressful Mistake
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Work with a local lender / mortgage broker who specializes in Miami condos.
They understand which buildings are eligible for conventional loans (often the cheapest type of loan to finance a condo in Miami), how to handle warrantable and non-warrantable loans, and how to navigate local condo nuances. -
Don’t rely solely on a generic pre-approval or verbal assurances.
Ask your lender / mortgage broker about their recent experience financing Miami condos and how they handle underwriting challenges. -
Work with a Realtor who knows Miami condos inside and out.
A good agent will flag buildings with financing challenges and recommend lenders / mortgage brokers who have successfully closed deals there.
Final Thoughts
Buying a condo in Miami offers many opportunities but comes with unique challenges. The wrong lender / mortgage broker can cost you money, time, and emotional energy, sometimes even the property itself.
Even when a building is warrantable, an inexperienced lender / mortgage broker with Miami condos can cause a last-minute denial, often after reassuring you everything is fine.
If you’re thinking about buying a condo in Miami, reach out to a local expert before you start your mortgage process. I can connect you with trusted lenders / mortgage brokers who know how to get deals done, without surprises or last-minute shocks.
You deserve a smooth, confident purchase. Don’t risk it with the wrong team.
Ready to get started?
Whether you’re just exploring options or ready to sell, find your next home, feel free to reach out. I’d be happy to answer your questions and help you sell, buy or rent the perfect property in Miami.
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