How to Make a Good Presale – Tips for Real Estate Developers

by | May 15, 2018 | Uncategorized

One of the significant elements in real estate is the concept of presale. While preselling is typically used in many industries, it highly impacts the success of real estate developments. For this reason, real estate developers are very focused on learning how to make a good presale.

Preselling in the Real Estate Industry

It is common knowledge that developments are typically built based on speculation. These developments are started after conducting a thorough research related to demand and pricing. It means that the success of a particular real estate development depends on what will follow in the future. Therefore, it is obvious that the risk is high since the market is still unpredictable despite research.

In order to reduce this risk factor, real estate developers are assigned the task of making successful presales. Preselling ensures that buyers have been secured even before the financing and construction has begun.

Preselling not only adds to the financing for the development but reduces the overall cost of financing as well. When the risk of development failure is low, the lender for the project is likely to offer lower rates for loan requests.

Increasing Significance of Preselling for Real Estate Developers

There was a time when preselling was more of a buzzword. Buyers also believed that purchasing before a project was fully on its way to development offered the opportunity for lower prices. Therefore, many buyers favored the idea of preselling.

However, markets evolve and preselling is less of a trend and more of a necessity nowadays. Depending on the locations of the developments, there could be a certain pressure on real estate developers about making successful presales. Some won’t get financing from the banks for the projects they have in the pipelines if they fail in presales. Presales prove that buyers have interest in a particular development and that results in interest from banks and lenders.

Therefore, we can say that the significance of presales ha increased over time. The real question is how real estate developers can increase the chances of successful presales.

In the following article, we discuss a few ways that can help the developers in preselling for their upcoming projects:

 

Validate the Developer

Presales are difficult because the buyers have literally nothing to view. It is easy to come up with key points for selling but you can’t prove them to the buyer. Start by validating the developer of the project. Build a connection of trust between the developer and the buyer. Discuss the history and portfolio of the developer when marketing. Talking about previous successful projects and offering a viewing can build trust with the buyer.

Increasing Significance of Preselling for Real Estate Developers

There was a time when preselling was more of a buzzword. Buyers also believed that purchasing before a project was fully on its way to development offered the opportunity for lower prices. Therefore, many buyers favored the idea of preselling.

However, markets evolve and preselling is less of a trend and more of a necessity nowadays. Depending on the locations of the developments, there could be a certain pressure on real estate developers about making successful presales. Some won’t get financing from the banks for the projects they have in the pipelines if they fail in presales. Presales prove that buyers have interest in a particular development and that results in interest from banks and lenders.

Therefore, we can say that the significance of presales ha increased over time. The real question is how real estate developers can increase the chances of successful presales.

In the following article, we discuss a few ways that can help the developers in preselling for their upcoming projects:

 

Make Tailored Presale Strategies

One of the biggest mistakes a developer can make is using the same method of making a presale with almost all kinds of projects. The buyer is not just making a purchase but making it for a particular need. It is important to tailor the presale strategy according to what type of project you have for development. For example, you must use a different method of preselling for condos and houses. This also helps you target the buyer audience; making it easier to convince based on particular needs.

Be Realistic

While marketing is about promoting and highlighting the good points of your project, you still have to be realistic. In fact, the buyer market has become smarter and will actually appreciate honesty. You must keep in mind that delays are always inevitable when it comes to development projects. Therefore, make sure that you give your buyers a realistic timeline about the finishing of the project. It is suggested to disclose a longer period of time than sticking to exceeding the buyer expectations.

Presales have not only become more important in the real estate industry but difficult as well. But if real estate developers evolve with the market and use smarter strategies, it is still possible to be successful at preselling. Invest time in creating a smart pitch, use the support of modern technology, and a presale will not be that far out of your hand.

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