Legal Definitions - presale

Presale refers to the legal process of selling real estate, such as homes, apartments, or commercial spaces, to buyers before the physical construction of the property has actually started.

This practice allows developers to secure funding and gauge market demand, while buyers might benefit from lower prices or the ability to customize certain aspects of their future property.

Here are some examples:

• Imagine a developer planning a new community of single-family homes. Before any foundations are poured or walls are erected, they might open a sales office displaying architectural renderings, floor plans, and material samples. Potential buyers can then sign purchase agreements and put down deposits for specific lots and home designs. This transaction, occurring entirely before construction commences, is a presale.

• Consider a large urban development company announcing plans for a new high-rise apartment building in a desirable downtown area. Even before groundbreaking, they might launch a marketing campaign, showcasing virtual tours and detailed blueprints of the future units. Individuals interested in living in the building can then commit to buying specific apartments, signing contracts and making initial payments, long before the building's structure begins to rise. This early commitment constitutes a presale.

• A commercial real estate firm intends to build a new shopping center with several retail units and office spaces. To secure tenants and financing, they might approach businesses with detailed plans and projected completion dates. A restaurant chain, for instance, might sign a lease agreement or even a purchase agreement for a specific unit within the future shopping center, committing to the space before any construction work has begun on the site. This agreement is an example of a presale in a commercial context.