Advantages of Buying Pre-Sale

Investing in properties during pre-sale is a strategy that can generate significant returns. Pre-sale contracts allow you to acquire a property before its construction or completion, offering various advantages for investors and real estate traders.

• Lower Prices: Pre-sale properties are usually offered at prices below market value once completed. For example, acquiring an under-construction apartment can cost up to 30% less than its final price.

• High Appreciation: By buying in early stages, you can take advantage of the value increase that occurs during the project's development. An investor who acquired a pre-sale property saw their investment increase significantly after the project's completion and the area's expansion.

• Payment Facilities: Developers often offer flexible payment plans during the pre-sale. This allows investors to better manage their cash flow by making payments in stages rather than a one-time outlay.

• Customization: Buying pre-sale offers the possibility to customize certain aspects of the property, such as finishes or layout, which can increase its value and appeal in the market.

• Investment Opportunity: For real estate traders, pre-sale is an opportunity to acquire assets at low cost and later sell them at higher prices, obtaining attractive profits.

In summary, pre-sale real estate contracts offer competitive advantages that can maximize gains and opportunities in the real estate market. However, it is essential to understand the associated risks and how to mitigate them to ensure a successful investment.

Risks and How to Mitigate Them

Despite the advantages, investing in pre-sale also carries risks that are crucial to recognize and manage adequately.

• Delivery delays: Projects can face delays for various reasons, such as financial problems of the developer or delays in permits. To mitigate this risk, research the developer's history. Companies with successful projects in their portfolio offer greater confidence.

• Changes in the project: Modifications to the original specifications may occur. To protect yourself, ensure the contract includes clauses that limit significant changes without your consent.

• Financial risk of the developer: If the company faces economic difficulties, the project could remain unfinished. Verify the financial stability of the developer and consider projects with a bank guarantee or backing from financial institutions.

• Market fluctuations: Changes in the economy can affect the property's value at the time of completion. Stay informed about market trends and diversify your investments to reduce the impact of potential downturns.

• Legal issues: Ensure the project complies with all necessary regulations and permits. Hiring a lawyer specializing in real estate can be a smart investment to review the contract and legal documentation.
  

A real case involves investors in a project where the developer did not obtain the required environmental permits, resulting in the project's cancellation and losses for buyers.

To mitigate these risks:

• Due Diligence: Thoroughly research the developer and the project.

• Protection clauses: Include conditions in the contract that favor you in case of non-compliance.

• Legal advice: Consult with professionals to ensure everything is in order.

By proactively addressing these risks, you can protect your investment and take advantage of the benefits offered by pre-sale purchases.

Important Clauses in the Contract

The pre-sale contract is the document that establishes the terms and conditions of the acquisition. Paying attention to key clauses is essential to protect your interests.

• Detailed description of the property: Ensure that the contract includes plans, technical specifications, and materials. This prevents unpleasant surprises when receiving a property that does not meet the agreed-upon standards.

• Delivery date: A deadline for the delivery of the property must be established. Include penalties or compensation in case of unjustified delays.

• Payment terms: Clarify the payment schedule, amounts, and conditions. If financing is involved, detail the interest rates and terms.

• Termination clauses: Set the conditions under which you can cancel the contract and the consequences thereof. This is vital in case of non-compliance by the developer.

• Guarantees and insurance: Include guarantees on construction quality and insurance to protect your investment in case of unforeseen events.

• Permits and licenses: The contract should indicate that the project has all the necessary legal authorizations.
  

Finally, remember that each contract is unique. Do not hesitate to negotiate terms that offer you more security and consult with a specialized lawyer.

As Warren Buffett once said, "Risk comes from not knowing what you're doing." Informing yourself and understanding every detail of the contract will allow you to invest with confidence and success in the real estate market.