Pre-selling

Also known as: Pre-selling Real Estate · Off-plan Property · Introductory Pricing Sale

Definition

Pre-selling, in the Philippines, is the practice of selling real estate properties (such as condominium units, townhouses, or subdivision lots) to buyers before or during construction, before the project is completed. Regulated under Presidential Decree No. 957 and managed by the Department of Human Settlements and Urban Development (DHSUD), pre-selling allows developers to raise capital to fund construction. In return, buyers are offered lower introductory prices, flexible installment schemes, and a wider choice of prime units, although they assume the risk of construction delays or developer insolvency. (Wikipedia, Pre-selling Govt)

Identities

Source Type	Identity
Wikipedia	Real estate investment
Wikidata	Q2344791
DBpedia	Real_estate_investment
ProductOntology	N/A
Wiktionary	N/A
Library of Congress Subject Headings (LCSH)	N/A
MeSH	N/A
NCBI Taxonomy	N/A
AGROVOC	N/A
Google Scholar	pre selling real estate condominium developer DHSUD PD 957 Philippines
ConceptNet	N/A
OpenCyc	N/A

Also Known As

Pre-selling Real Estate
Off-plan Property
Introductory Pricing Sale

Examples and Analogies

Condo Pre-selling: Purchasing a condo unit when the site is still in the excavation or foundation laying phase.
Subdivision Pre-selling: Buying a residential lot before roads, drainage systems, and houses are constructed in the estate.

Usage Scenarios

1. Buying a pre-selling condo unit

An investor pays a reservation fee for a condo that will be completed in 4 years, enjoying a 20% discount compared to finished RFO units. (Source)

2. Negotiating installment down payments

A buyer avails of a developer’s promo offering 0% interest down payment over 36 months for a pre-selling townhouse. (Source)

Strategies

Buy pre-selling properties only from top-tier, financially stable developers with a proven track record of timely project completions.
Verify that the developer holds a valid DHSUD License to Sell (LTS) for the project before paying any reservation fees.

Security and Safety Measures

Understand your rights under the Maceda Law (RA 6552) regarding refunds and grace periods for installment payments.
Ensure that all promises, specifications, and completion dates are written into the Contract to Sell.

Historical Context

Pre-selling became a standard commercial practice in the Philippine real estate market during the housing boom of the 1990s and 2000s. To prevent rampant scams where developers collected funds and abandoned projects, the government enforced Presidential Decree No. 957 (the Subdivision and Condominium Buyers’ Protective Decree) in 1976, mandating registration, licenses to sell, and performance bonds for all pre-selling projects. (Wikipedia) (Source)

Challenges and Controversies

Construction Delays

Unexpected material shortages, weather issues, or financial bottlenecks can delay project turnover by months or years.

Risk of Non-Completion

Boutique or unstable developers can face insolvency, leaving buyers with unfinished structures and complex legal battles to recover funds.