What is Pre-Sale (Preventas)?
Pre-Sale (Preventas)
/preh-VEN-tahs/
Quick Definition: Pre-sale (preventas in Spanish) refers to purchasing property before construction is completed - often before it even begins. Buyers typically receive discounted prices (10-30% below final market value) in exchange for committing early and making payments during the construction phase, usually over 12-36 months.
Buying Tomorrow's Property at Today's Prices
Pre-sale purchasing has become increasingly popular in Mexico's growing real estate markets, particularly in the Bajío region where demand from international buyers continues to rise. Developers offer pre-sale opportunities to secure funding for construction while providing early buyers with significant price advantages and flexible payment terms. Instead of requiring full payment upfront, preventas typically involve staged payments aligned with construction milestones - making property ownership more accessible to buyers who can't or prefer not to pay cash immediately.
The pre-sale model benefits both developers and buyers: developers gain capital to fund construction without traditional bank financing (which can be expensive or difficult to obtain in Mexico), while buyers lock in lower prices before market appreciation and spread payments over time, reducing immediate cash requirements. However, pre-sale purchases carry unique risks compared to buying completed properties, making due diligence on the developer's track record, financial stability, and legal protections essential for international buyers.
Why Pre-Sale Matters for Bajío Buyers
In San Miguel de Allende, Querétaro, and surrounding Bajío communities, pre-sale opportunities often appear for boutique residential developments, eco-communities, and wellness-focused properties that align with international buyer interests. These projects frequently offer unique amenities like thermal water access, sustainable design, or prime locations that become increasingly scarce as development continues. Buying during pre-sale phase allows buyers to secure preferred lots, customize finishes, and benefit from appreciation as the community develops - potentially gaining 20-40% equity before even taking possession.
How Pre-Sale Purchases Work
Pre-Sale Payment Structures in the Bajío
Payment plans for pre-sale properties in Mexico vary by developer but typically follow similar structures designed to spread costs over the construction period. Understanding these payment models helps buyers plan financially and assess whether pre-sale purchasing fits their circumstances.
Example: Typical Pre-Sale Payment Plan
A wellness community development in San Miguel de Allende offers 2-bedroom homes at pre-sale price of $250,000 USD (estimated final value $320,000 USD). The 24-month payment structure:
- Month 0 - Reservation: $10,000 USD (4%)
- Month 1 - Contract Signing: $40,000 USD (16%) - Total: 20%
- Months 2-18 - Construction Phase: $8,824/month (approximately 3.5% monthly)
- Month 19-23 - Pre-Delivery: $10,000/month
- Month 24 - Final Delivery: $50,000 USD (20%)
This structure allows the buyer to spread $250,000 over 24 months with manageable monthly payments, while the developer receives steady capital to fund construction. The buyer gains approximately $70,000 in equity ($320,000 market value minus $250,000 paid) before taking possession.
Advantages of Pre-Sale Purchases
Pre-sale properties offer several compelling benefits for international buyers with appropriate risk tolerance:
- Price Discounts: Typically 10-30% below projected completion market value
- Payment Flexibility: Spread costs over 12-36 months instead of lump sum
- Customization Options: Select finishes, colors, and upgrades during construction
- Appreciation Potential: Gain equity as project develops and market values rise
- Prime Selection: Choose best lots, views, or units before public release
- New Construction Quality: Modern building standards, warranties, and current code compliance
- Planned Communities: Access to developments with cohesive design and amenities
- Investment Leverage: Lower initial capital requirement enables portfolio diversification
Risks and Considerations
While pre-sale purchases offer advantages, they carry distinct risks that completed property purchases don't:
Protecting Yourself in Pre-Sale Purchases
International buyers can significantly reduce pre-sale risks through careful due diligence and proper legal protections:
- Developer Track Record: Research completed projects, financial stability, and reputation
- Legal Review: Have independent attorney review all contracts before signing
- Escrow Accounts: Ensure payments go to protected trust accounts, not directly to developer
- Construction Guarantees: Verify completion bonds or insurance protecting buyer deposits
- Title Verification: Confirm developer owns land free of liens before committing
- Realistic Timelines: Add 6-12 months buffer to developer's estimated completion date
- Payment Milestones: Tie payments to verified construction progress, not just time
- Exit Clauses: Negotiate refund provisions if specific delays or quality issues occur
In Mexico, pre-sale protection mechanisms are less robust than in some countries, making independent due diligence critical. Unlike some markets where government insurance protects buyer deposits, Mexican pre-sale buyers rely primarily on contractual protections and developer reputation. Working with established developers who have multiple completed projects provides significantly more security than first-time developers with only renderings and promises.
Pre-Sale vs. Completed Property Purchase
Understanding the fundamental differences helps buyers choose the right approach for their circumstances:
Pre-Sale (Preventas)
Lower purchase price (10-30% discount). Extended payment timeline over construction. Customization and unit selection options. Higher risk from construction delays or developer issues. No immediate occupancy or rental income. Requires trust in developer and future market. Potential for significant appreciation.
Completed Property
Market price reflects current conditions. Immediate full payment typically required. Buy-as-is with limited modification options. Lower risk - can inspect actual finished product. Immediate occupancy or rental income. Known quantity with established neighborhood. Appreciation based on existing market dynamics.
Frequently Asked Questions
This is one of the primary risks of pre-sale purchases. Without proper protections, buyers may lose their deposits and have limited recourse. To minimize this risk, ensure payments go into escrow or trust accounts (not directly to developer), verify the developer carries completion insurance or bonds, work only with developers with proven track records, and have your attorney include strong penalty clauses for non-completion in your contract. Some buyers also purchase title insurance from specialized providers covering construction risk.
Mexican mortgages for pre-sale properties are challenging to obtain. Most banks won't finance until construction reaches 60-80% completion and appraisals can be conducted. Foreign buyers typically need cash or home country financing for pre-sale purchases. Some developers offer internal financing, but rates are usually higher (8-12% annually) than traditional mortgages. Plan to have funds available through construction period.
Legitimate pre-sale discounts typically range from 10-30% below projected completion market value, with early-stage purchases (before construction begins) offering larger discounts than purchases mid-construction. Be suspicious of discounts exceeding 40% - they may indicate developer desperation, unrealistic market projections, or quality concerns. Compare pre-sale prices to similar completed properties in the area to verify value.
Essential contract elements include exact property description and lot/unit number, total purchase price and payment schedule, estimated completion date with penalty clauses for delays, detailed specifications for finishes and materials, process for customization and change orders, conditions for refund if project is abandoned, escrow or trust account details for payment protection, developer warranties on construction quality, and clear process for final inspection and acceptance.
Many pre-sale contracts allow assignment (transferring your contract to another buyer) for a fee (typically 5-10% of sale price paid to developer). This lets you sell your rights before taking possession, potentially capturing appreciation without completing the purchase. However, contracts must explicitly allow assignment - some developers prohibit it. If considering pre-sale for short-term investment, verify assignment rights before committing.
Construction timelines vary significantly by project size and complexity. Single-family homes typically take 12-18 months, small residential developments (10-30 units) usually require 18-24 months, and larger master-planned communities may take 24-48 months or more. Always add 6-12 months buffer to developer estimates - delays from permits, weather, material shortages, or funding issues are extremely common in Mexican construction.
Related Terms
Contrato de Promesa
Pre-sale agreement binding buyer and seller
Fideicomiso
Bank trust sometimes used for pre-sale protection
Escritura
Final property deed issued upon completion
Master-Planned Community
Large development often sold through pre-sale
Anticipo
Down payment or deposit for pre-sale
Entrega
Property delivery upon construction completion
Considering Pre-Sale Property in the Bajío?
Navigate pre-sale purchases with expert guidance. Our team helps international buyers evaluate developers, review contracts, verify protections, and make informed decisions about off-plan property investments in Mexico's Bajío region.