Real estate pre-sale: What is it, and how to determine if it suits you?

What is real estate pre-sale?

Real estate pre-sale is a process in which developers offer properties that have not yet been constructed to potential buyers. These buyers make an initial deposit to secure their interest and often have the option to customize some aspects of the property before construction begins.

The remaining payments are made as the construction progresses and are culminated with a final payment upon the completion of the project, making pre-sales one of the preferred options for investors in recent times.

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What do I need to buy in pre-sale?

The requirements for purchasing a property in pre-sale are very similar to those of any other property purchase process. It's worth noting that requirements can vary depending on the developer and the project, but generally, there are common conditions in most of these processes:

1. Personal identification: Buyers must present valid official identification to prove their identity and sign the contract. National ID or a passport are two acceptable documents for this initial step.
2. Proof of address: Buyers also need to provide proof of their current residence, such as a recent utility bill.
3. Initial deposit: Most developers require an initial deposit to reserve the property. The deposit amount varies depending on the developer and the project but typically ranges from 10% to 30% of the total property price.
4. Financing: If you choose this purchase option, you'll need to demonstrate your creditworthiness and undergo a capacity-to-pay evaluation. It's essential to note that financing doesn't cover 100% of the property cost, as the initial deposit is separate from this formula.

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Advantages and Disadvantages of Real Estate Pre-Sales

Advantages:

1. Customization: Buyers can make requests to developers regarding interior finishes, materials, and other aspects of the property since it's not yet constructed.
2. Lower Price: Pre-sales typically come at a lower price compared to the full sale price once construction is completed.
3. Incentives and Financing: Developers may offer discounts on the price or better financing terms to encourage purchases.
4. Investment Opportunity: Investing in a property before it's built can result in a higher return, especially when renting the property as soon as construction is finished.

Disadvantages:

1. Construction Delays: Various factors can lead to construction delays, causing a delay in property delivery and deposit refund.
2. Reality vs. Expectations: Despite buyer input on certain design aspects, the final result may not always match expectations.
3. Market Fluctuations: Property values in the real estate market can affect expected returns.

Is it worthwhile to buy a property in pre-sale?

After considering the pros and cons of real estate pre-sales, it becomes clear that it offers excellent opportunities for investors in terms of payment flexibility and high returns. However, buyers must conduct thorough research to ensure the reliability of the developer. Working with professionals in the field, like Jaguar Tulum, can provide the best guarantees for secure pre-sale transactions. They collaborate with reputable developers and offer personalized services tailored to each client's unique needs.

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