PreConstruction Offers - Posted by Gerald-DC

Posted by BillW on November 27, 2001 at 18:50:32:

Here are a few things to think about if you’re doing this:

  • You get to select the lot you want.
  • Sometimes, they will sell the beginning of a project at low prices to attract customers.
  • If there is a HIGH demand, the price will go up before you take delivery. (This will depend on where you are and local market conditions.) ((Lots of good stories on this one.))
  • If you can wait until the end of the project, the builder MIGHT sell the last few at a discount to clear inventory. (Won’t work in a strong market.)


  • Builder might go broke and never finish the subdivision. Seen it, lotsa times.
  • In a weak or flat market, prices won’t go up at all.
  • If it’s a big subdivision, or one in multiple phases, you won’t be able to resell until it’s done, unless you take a loss. The builder will have plenty of brand new houses available for your potential customers at a lower price than yours.
  • If there are lots of other subdivisions around, sales prices may be flat if you’re not in a strong market.


  • Only buy if there is a STRONG market, unless you plan to live there for years.
  • Check out the builder VERY carefully. Make sure they have a reputation for completing their subdivision projects, not only on time, but without problems. Look at the larger builders, like Pulte, Kaufman & Broad, Lennar, and so on, depending on where you live. Beware of small time, foreign builders with big flashy cars. When they rip you off, they are real hard to find. (For a look at how this happens, look up articles in the Milwaukee Journal about the Shah fiasco in Oak Creek, Wisconsin in the last year or two.)
    *Try to be in early or late, depending on your needs.
    Without knowing where you are or what specifically you’re trying to accomplish, that’s about all I can think of at the moment.
    Good luck to you,

PreConstruction Offers - Posted by Gerald-DC

Posted by Gerald-DC on November 27, 2001 at 24:38:17:

What are the pros and cons of making offers on preconstruction houses in new developments? What are the keys issues that one should be mindful of in these types of deals?

Mucho Gracias Amigos.