Jenna Van Alstine, Sales Director for rennie’s Developer Services team, has been with the company since 2011. Over the course of her real estate career, Jenna has built relationships with prominent developers, and earned a wealth of experience in luxury real estate marketing and real estate investment analysis. Working with rennie’s Marketing and Sales Operations teams, Jenna has successfully led strategic sales programs designed to sell pre-sale projects smoothly and successfully.
We had the pleasure of sitting down with Jenna to learn her perspective on the nuances of the pre-sale journey, including client care tips, important milestones, and more best practices.
On when to buy a pre-sale home
When to purchase a pre-sale home depends on your client’s goals. Pre-sales are a great opportunity at any time if your client wants to get into the market but needs more flexibility to save for their down payment, or their financial situation is going to be better in the next three years. Sometimes that runway works well for clients. On a broader scope, a good reason to buy pre-sale right now is interest rates. Considering today’s rates, chances are if you bought a pre-sale now, in a few years the rates will likely be better.
On managing client expectations
The time between purchase and completion can cause pain points for clients, so once you’ve educated them on the process, put all of those details in an email they can easily refer back to. This will ensure your clients remain happy because it’s easy to forget details over an extended period of time. This step can really diffuse emotion and frustration.
On preparing your client for pre-sale milestones
Over the two to three-year time period between their pre-sale purchase and their new homes’ completion, it’s important to stay ahead of any potential frustrations your clients may face.
For example, when you notice your clients’ deposit coming due a year later, reach out to make sure they’re prepared well in advance of that next step. A few milestones you want to guide your clients through include the deposit timelines, construction & completion updates, as well as the pre-delivery walk through.
- deposits: The developer will be requesting substantial payments throughout the pre-sale journey, typically with a deposit structure that is divided into three installments. Sometimes, developers may only inform buyers 15 days in advance of a deposit payment being due, so it's vital as a realtor to help your client anticipate and prepare for these payments.
- completion & construction updates: One of the main pain points for pre-sale clients is there is rarely an exact completion date until a month– or often less –before completion. It’s important to temper your clients’ expectations with consistent communication throughout the two to three-year timeframe.
- pre-delivery walk-through: Set expectations and educate your clients on a typical pre-delivery walk-through. It’s important they understand deficiencies are normal for a new-build, and that you are there to help move the process along for them.
Firstly, it’s important to understand you are dealing with a business and not an individual seller. Developers will not negotiate with you at 8pm –and that’s okay. There are many factors which impact a developer’s willingness or ability to negotiate in the first place, so consider this: Is the developer in a position to negotiate? Find out the answer in advance to mollify your client’s expectations. If there is no negotiation room on price, there might be other opportunities to create extra value for your client, for example a free upgrade like an additional parking stall or a storage locker. As the realtor, ask the developer in advance so you’re equipped with the parameters. And don’t forget–being a nice person gets you far! That salesperson is on your team in a sense and being a nice person goes a long way in getting your client what they want.
On thinking like a developer
Developers that require less financing would be less motivated to sell quickly. And when you take the pace of sales into consideration, it would be unrealistic to expect a developer to negotiate while their project is selling well. However, the timing of the sales process could impact the developer’s decision to accept a lower offer. For example, if they are at the very end of a sales program and have achieved their financing targets, they might be more open to negotiating when compared to launch. Another factor at play is whether it’s a completed product or is still in the pre-sale phase. Completed developments come with higher carrying costs and interest rates which can motivate a developer to be more negotiable on price.
On breaking down pre-sale markets
Whether it’s a good time to buy is dependent on the product and the location. The pre-sale market is different in different neighbourhoods; it’s very location-specific as well as product-specific.
- Downtown: The downtown core is an unique tough market for pre-sale because of land and construction costs. In order to make the numbers work, prices have to be quite high. The current large gap between resale and pre-sale pricing Downtown is hard for a lot of buyers to justify. That said, we all know Downtown isn't getting larger in space and land, so if it's within your client's budget, a pre-sale purchase Downtown is a pretty solid long term investment in my opinion.
- East Vancouver: There are a lot of opportunities in the developing neighbourhood of East Vancouver. While most people are paying attention to larger energy centres, a lot of realtors and buyers forget about East Vancouver and how close it is to Downtown. There are some great deals for new projects in this area,particularly right now.
- Burnaby: Another location to look out for this fall is the Burnaby area. It may be a good opportunity for your client because there are a lot of new projects coming to market. This means a lot of options for buyers while developers will have to be quite competitive on price.
On leaning into high expectations
Today’s buyers are savvy and their expectations are higher–and that’s a great thing. Keep leaning into higher expectations for developers and the service in the sales centres, that’s something we value greatly at rennie. This is a large purchase and your client is exercising a great deal of trust by buying a home that won’t be completed for a number of years, so they should expect great product and great service through the entire pre-sale process.
To gain more insights into the pre-sale journey with Jenna, read part one of our conversation on the rennie post.
