Pre-construction sales are those real estate transactions that are initiated prior to a particular project being constructed.

Q. What’s the benefit of buying in the pre-construction phase?
A. Pre-construction prices are generally lower than those of existing like-kind resales of existing real estate.

Q. Why do developers discount the prices of units for   pre-construction buyers?
A. The prices are discounted to give the buyers the incentive to buy something they can’t see, touch nor feel. Sky and paper are harder to sell than concrete and steel. Discounts often times make the difference.

Q. Why do developers sell pre-construction rather than build first?
A. Developers sell pre-construction, even at the lower prices because they usually need pre-sales in order to secure their construction loan. Letters may require that 50%-80% of a project be sold before construction can begin.

Planning and patience pay off when buying pre-construction property. You need to plan so that you have the necessary funds when it comes time to convert. And, you need patience waiting for the documents to be delivered and for the condo to be built.

A recently completed beachfront condo shows just how well planning and patience pays off. Units were selling in the $300’s at the Reservation Agreement Phase, but by the time the project was completed, the same units were selling in the $490’s. Of course, there is no guarantee that other projects will perform as well. But if the pre-construction prices compare favorable with existing resales, then there is a good probability that you will enjoy substantial appreciation for your patience.