Should I Buy Pre-Construction?

Pre-construction purchases make sense for buyers who have a long planning horizon, want the ability to customize their residence, are comfortable with delivery risk, and believe the market will appreciate between purchase and delivery.

Pre-construction makes sense when

The project is from a proven developer. Developers with a track record of delivering projects on time and within the advertised specifications have earned the right to ask buyers to accept delivery risk. Developers without that track record have not.

The buyer has flexibility on occupancy timing. Pre-construction projects deliver one to four years after presale launch. Buyers who need to be in the property by a specific date should purchase resale unless the delivery timeline is contractually firm.

The pricing represents a genuine discount to projected completed value. Pre-construction buyers are compensated for taking on delivery risk through pricing that is below where the market will likely be at completion. If the pre-construction pricing does not represent a discount — which is increasingly common in competitive markets — the risk is not being compensated.

The HOA structure and operating plan are clearly documented. Pre-construction buyers should review the estimated HOA budget, the developer's plan for building operations, and the transition from developer to owner control carefully before committing.

Pre-construction does not make sense when

The buyer needs the property on a defined timeline and cannot accept schedule risk. The developer has a weak or unverified completion track record. The presale pricing is at or above where comparable completed properties are trading. The buyer requires financing that is not available for pre-construction purchases.