Understanding pre-sale milestones

Construction lending is exposed to what a completed development is worth and whether buyers exist for it. Pre-sale contracts are the most direct evidence a credit team has that demand is real at the prices in the feasibility, which is why the sales campaign ends up inside the funding timetable.

Criteria are not uniform. They vary with the lender, the funding structure, the project’s size and location, the developer’s track record and the market at the time. Two projects in the same suburb can face different criteria.

What lenders usually look at

Developers are commonly asked to evidence contracted sales a lender is willing to count, rather than a list of interested buyers.

• Executed contracts, with deposits held as required by the contract and relevant legislation.
• The stage, stock mix and value the contracts represent, not just the count.
• Purchaser type and finance position where the lender asks for it.
• Contracts that remain on foot — cooling-off expiry and condition status matter.
• A clear separation between enquiries, reservations and exchanged contracts.

How a development works toward the milestone

The milestone is reached by a normal sales campaign run with unusual discipline. The pipeline has to be large enough and qualified early enough that contracts arrive inside the funding timetable rather than after it.

• Position the project and prepare the brand, pricing structure and buyer collateral before media spend begins.
• Open the channels buyers actually use — portals, paid social, search, the project website, referrers and agent networks.
• Answer every enquiry promptly, capture the source, and qualify budget, purchaser type, finance position and timeframe.
• Move qualified buyers to a named licensed agent for appointments, negotiation and contract issue.
• Track cooling-off, conditions and deposits so a contract counted as progress is genuinely on foot.
• Report exchanged contracts separately from pipeline so the picture given to the lender is honest.

Where the campaign meets the funding timetable

Once funding depends on contracts, the campaign has a deadline that is not commercial preference. Contracts lag enquiries, so allow for qualification, inspections, negotiation and cooling-off. Release structure matters, because releasing everything at once can stall the momentum a lender is watching for. And discounting to reach a number can undermine the valuations the same lender relies on.

Who does what

Your lender sets the criteria and decides funding. Your finance broker or adviser structures and negotiates the facility. Your lawyer prepares contracts and advises on them.

PresalePartner sits on the sales side: campaign and brand, enquiry response and qualification, licensed agents through negotiation and contract progression, and reporting that shows contract status honestly. Lenders set qualifying pre-sale criteria. We don’t give finance advice. We run marketing and licensed sales against the milestone you and your financier set.

This article is general information about how pre-sales and development funding interact in Australia. It is not financial, credit, legal or tax advice, and no funding or sales outcome is guaranteed.