BENEFITS OF SELLING PRE-SALE

These days, it's not uncommon for new infill properties to hit the market before they are complete. In fact, many new infills are marketed for sale before there is even a hole in the ground. Although it can be much more challenging to sell a new home before construction is complete, there are some significant advantages to selling pre-sale.

Minimize Project Risk

Securing a pre-sale contract allows for both certainty of sale and certainty of the sales price. These can both be very important in minimizing the risk of a market downturn or changes to the market dynamics and competing inventories once the home is complete.

Limit Carrying Costs

Perhaps one of the most vital benefits of selling before completion is the fact that the buyer will take possession as soon as the home is complete. This removes the additional costs of carrying a vacant home through cleaning, staging, marketing, sale and waiting for possession - which can often amount to months of extra expenses.

Facilitate Project Financing

Securing financing on a new project is much easier when there is a sale in place, and often better rates and terms can be negotiated with a lender when at least one-half of a project is pre-sold.

Leverage/Scale Development

With one project sold, it is easier to qualify and move forward on other projects simultaneously. This allows builders and developers to leverage their time and resources and build more projects concurrently.

Maximize Profitability

The combination of lower carrying costs, lower financing costs, and the option to build more projects in the same amount of time mean better profitability overall!