Investors of South Padre Island
property and real estate realize the value of buying pre-construction. "Ground
floor" investments are a great way to save thousands of dollars. We have access
to all pre-construction developments on South Padre Island, Port Isabel and
E-MAIL ME, stop in, or call me to find out the latest details on current
Pre-Construction Sales are
made prior to the beginning of construction or completion.
Q & A
Q. What is the benefit of
purchasing during the pre-construction phase?
Prices generally lower than those of existing condos. Buyers have a
chance to purchase tomorrows construction at today's prices. This is not
dissimilar to buying futures.
Q. Why does the developer
discount these units?
Discounted prices are given to the buyers as an incentive to purchase
something they cannot see, touch, or feel.
Q. Why do the developers sell
pre-construction rather than build first?
Developers sell pre-construction, at lower prices because they need
pre-sales in order to secure their construction loan. Most lending
institutions will require 60%-80% of a project to be sold before
construction can begin.
Here are the Four Phases
to a Pre-Construction Transaction:
Document Examination Period
Contract for Sale
Closing the Sale
Lets look at each phase in
1 Reservation Agreement:
The developer has preliminary
floor plans, site plans, amenities and prices. All are subject to change.
Buyers reserve unit(s) with a minimum "intent to purchase" deposit- usually
$5,000-10,000. The deposit is made to an interest bearing trust account. The
Deposit does not go to the developer. Buyer's deposit can be refunded on
demand at any time prior to conversion to Contract for Sale. There is no
2. Document Examination
The developer will deliver to
the buyer the approved Condominium Documents. The "condo-docs" contain the
final, exact details including the site plan, floor plans, amenities, rules,
by-laws, budget, etc. The buyers then have 15 days in which to review the
documents and make the decision to go forward with the purchase or request a
refund of the deposit.
3.Contract for Sale:
Buyers are presented with the
purchase agreement and are required to put up the balance of the earnest
money deposit (usually 20% of the contract price). At that point the
contract becomes binding on both parties. When enough of the reservation
agreements convert to contracts for sale, the developer proceeds to get the
construction loan for the project.
4.Closing the Sale:
When the condominium is
completed, a Certificate of Occupancy will be issued. The buyer then
performs a walk-through inspection and then goes to closing where they put
up the balance of the purchase plus closing costs are paid.