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Pre-sales allow customers to purchase products or services before they are available, such as real estate, automobiles, and books. However, risks include delays and code issues, which can be costly. It is important for customers to ensure problem clauses are included in contracts.
Pre-sales provide an opportunity to purchase a product or service before it is available for use. Real estate and automobiles are examples of products offered for presale. While buying through a pre-sale offers a chance to secure the sale, risks are involved. Buying a home or automobile through a pre-sale that falls through or is delayed can be costly. The customer’s money is limited, without using the promised product or service.
New home construction is often marketed in presale. Customers visit a model condo or home that represents what the finished product looks like. If satisfied, the customer places an order for the construction.
Pre-sale real estate contracts are drawn up with the conditions of sale and the final purchase price. Many pre-sold homes come with many appliance, flooring, and paint options for the customer to choose from. The client waits for the house to be complete before moving in.
Risks include construction delays, code issues, and your mortgage falling due before your home is move-in ready. This causes the client to pay a double monthly payment – the mortgage and a rent for a temporary residence. Additionally, local municipalities may block construction due to codes or permit issues. The customer’s money is already tied up in the presale purchase, which may prohibit them from walking away and buying elsewhere. It is important for the customer to ensure that a problem clause detailing remedies for delays is included in the contract.
Automobiles may 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 order. Color options, interiors, and options are typically provided. Once the order is completed, a deposit is taken. Car orders can take anywhere from one week to one year, depending on availability. Estimated delivery dates are usually included in the presale contract.
New books by well-known authors and celebrities may also be offered for presale. Online sites and bookstores advertise the upcoming book and offer customers the option to place an advance order. Most book pre-sales must be paid in full at the time of order. Upon arrival of the book, customers are advised to come and collect the paid copy.
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