As part of the decision-making process in purchasing a property in a resort location, a Buyer should consider the merits of purchasing pre-construction property. 

If you are new to the concept of purchasing pre-construction, it would be helpful to understand the basic steps in the process.

A developer determines the demand for a condominium or subdivision project through pre-construction sales.  Since a Buyer is being asked to purchase something that is still intangible, the developer gives incentives to prospective Buyers early in the process through discounted prices.  During the course of sales and construction, prices typically increase significantly thereby enhancing the probability that an early purchaser will accrue equity in the property before construction is completed.

There are usually four phases in pre-construction sales:

The first phase is the reservation or option agreement phase during which the developer usually supplies architectural renderings and floor plans.  A token down payment, which is usually $1,000 to $10,000, is deposited into an escrow account and is usually fully refundable. 

The second phase involves the right of rescission during which the developer supplies governing documents such as the Condominium Declaration and Bylaws.  Upon their review, the prospective buyer is given the opportunity to withdraw from the purchase with no penalty and usually the deposit is fully refundable.

Third is the contract phase during which each party enters into a binding contract for the purchase of a particular unit.  The Seller usually requires an additional financial commitment from the Buyer at this time. 

The fourth an

d final phase is closing during which the condominium receives a Certificate of Occupancy and both the developer and the buyer finalize the purchase.

Pre-construction purchases provide one more tool for a Buyer to utilize in the purchase of resort property.

Pre-Construction Sales Topics