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South Padre Island
Welcome to South Padre Island Real Estate


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Pre-Construction Tips


Investors of South Padre Island property and real estate realize the value of buying pre-construction. "Ground floor" investments are a great way to save thousands of dollars. We have access to all pre-construction developments on South Padre Island, Port Isabel and Laguna Vista.


Please E-MAIL ME, stop in, or call me to find out the latest details on current pre-construction opportunities.


Pre-Construction Sales are made prior to the beginning of construction or completion.


Q & A
Q. What is the benefit of purchasing during the pre-construction phase?
A. Prices generally lower than those of existing condos. Buyers have a chance to purchase tomorrows construction at today's prices. This is not dissimilar to buying futures.
Q. Why does the developer discount these units?
A. Discounted prices are given to the buyers as an incentive to purchase something they cannot see, touch, or feel.
Q. Why do the developers sell pre-construction rather than build first?
A. Developers sell pre-construction, at lower prices because they need pre-sales in order to secure their construction loan. Most lending institutions will require 60%-80% of a project to be sold before construction can begin.


Here are the Four Phases to a Pre-Construction Transaction:

Reservation Agreement
Document Examination Period
Contract for Sale
Closing the Sale

Lets look at each phase in further detail:

1 Reservation Agreement:
The developer has preliminary floor plans, site plans, amenities and prices. All are subject to change. Buyers reserve unit(s) with a minimum "intent to purchase" deposit- usually $5,000-10,000. The deposit is made to an interest bearing trust account. The Deposit does not go to the developer. Buyer's deposit can be refunded on demand at any time prior to conversion to Contract for Sale. There is no risk.

2. Document Examination Period:
The developer will deliver to the buyer the approved Condominium Documents. The "condo-docs" contain the final, exact details including the site plan, floor plans, amenities, rules, by-laws, budget, etc. The buyers then have 15 days in which to review the documents and make the decision to go forward with the purchase or request a refund of the deposit.
3.Contract for Sale:
Buyers are presented with the purchase agreement and are required to put up the balance of the earnest money deposit (usually 20% of the contract price). At that point the contract becomes binding on both parties. When enough of the reservation agreements convert to contracts for sale, the developer proceeds to get the construction loan for the project.
4.Closing the Sale:
When the condominium is completed, a Certificate of Occupancy will be issued. The buyer then performs a walk-through inspection and then goes to closing where they put up the balance of the purchase plus closing costs are paid.