Pre-sales allow customers to purchase products or services before they are available, but there are risks involved such as delays and the customer’s money being tied up without receiving the promised product. Real estate, cars, and books are examples of products offered through pre-sales. It is important for customers to ensure that problem clauses are included in the contract detailing remedies for delays.
Pre-sales provide the opportunity to purchase a product or service before it is available for use. Real estate and automobiles are examples of products offered for pre-sale. While purchasing through a pre-sale offers the ability to secure the sale, there are risks involved. Buying a home or car through a pre-sale that falls through or is late can be costly. The customer’s money is tied up without using the promised product or service.
New home construction is often marketed through pre-sales. Customers visit a model condo or home that represents what the final product will look like. If satisfied, the customer places an order for construction.
Pre-sale real estate contracts are established with the conditions of sale and the final purchase price. Many pre-sold homes come with many appliances, flooring, and paint options for the customer to choose from. The client waits until the house is completed before moving in.
Risks include construction delays, code issues, and the mortgage falling due before the home is ready to move in. This makes the customer pay a double monthly payment – the mortgage and rent for a temporary residence. Additionally, local municipalities may delay construction due to codes or permit issues. The customer’s money is already involved in the pre-order purchase, which may prohibit them from walking away and shopping elsewhere. It is important for the customer to be sure that a problem clause is included in the contract detailing remedies for delays.
Cars can also be offered through pre-sales, especially new models or very popular or expensive vehicles. Customers visit a showroom and examine a demo vehicle, then place their orders. They are usually given colors, interiors and option options. Once the order is completed, a down payment is charged. Car orders can take anywhere from a week to a year, depending on availability. Estimated delivery dates are usually included in the pre-sales contract.
New books by popular authors and celebrities can also be offered through pre-sales. Online websites and bookstores advertise the upcoming book and offer customers the chance to pre-order. Most book pre-orders must be paid for in full at the time of order. When the book arrives, customers are notified to come pick up their paid copy.
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