The Pros and Cons of Buying Pre-Construction
Selling pre-construction means selling a condominium or house in a track before it has actually been built. Moving units pre-construction is essential for many developers. In most cases, in order to start construction about 50-80% of the inventory needs to be sold. That means an agent has to sell without using the usual tools like open houses and photos of the finished product. There are pros and cons to taking on pre-construction real estate sales. The reality is that just like everything, selling pre-construction is perfect for some agents.
When an agent meets a developer and begins selling their units, an agent knows a few things about the properties.
Real estate agents will learn:
- Price range
- Developer information
- Conceptual photos
- Floor plan
- The address
1. Be The Very First
There is something to be said about being the very first person living in a house or condo. This is a major selling point for agents looking to start selling pre-construction. Buyers will be enticed by the thought of using brand new appliances and fixtures, so emphasize this fact. It is a major ‘Pro’ to confidently tell a buyer that they’ll be the first to light up the stove or fire up the shower.
When opting in for a place pre-construction a buyer is often able to choose some of their own appliances or finishes. Buyers should be able to give their opinion on things like the floor finish, plumbing fixtures, or appliances. This is another great selling point for real estate agents. To ensure this is possible be sure to sit down with the developer and get a list of possible customizable option for pre-construction buyers. Always ask them up front if these custom choices will be considered upgrades so you don’t incur extra cost for our clients.
3. Pay Over Time
Oftentimes a pre-construction buyer can opt-in with a portion of the deposit and pay the rest over the time it takes to build the place. This is helpful when selling to first-time homebuyers and can make it easier to sell a space that people can’t see and touch. Utilize real estate buyer personas to prep for homebuyers and what they are looking for financially.
1. Expect Delays
Like most construction projects, you can expect delays when selling pre-construction for a developer. This is a major con for a buyer looking to move into their new home, so an agent should be sensitive. Never give out building schedules without being frank about the possibility of delays. Also, it’s ideal to take one-on-one time with the development team and ask them what might delay construction. This way, you can stay ahead of schedule changes.
2. Hard To Sell An Idea
When selling a house you are using the house itself as a selling tool. This isn’t available for pre-construction sales, and that can pose a challenge for many agents. Instead of letting this be a ‘Con’, build an arsenal of tools to use instead. Things like a bullet list of customizable and upgrade options, concept photos, and if possible, more. Be frank with developers that the more they spend in 3D video tours and future condo amenity information the more pre-construction homes we’ll sell.
There are pros and cons to everything, but that’s never stopped anyone from trying. Selling pre-construction isn’t impossible, and knowing what could get in your way before it even crosses your path is the first step to success. Selling pre-construction condos or houses is a great way for a new agent to find their footing or a veteran agent to stay on top of their sales and marketing skills.
And with any great sale, there’s always a waiting period once a deal is closed. Learn how about how a commission advance works and when to take advantage of this service.