On June 28, 2024, we had the privilege of presenting to 60 dedicated realtors about the nuances and responsibilities of selling preconstruction residential real estate in Los Cabos.

The workshop, "The Dangers of Preconstruction," was led by Fletcher Wheaton and Jonatan Espinosa Nishisawa, with Michael Schaible's notable intervention. It was generously sponsored by Naya Homes.

At the time of the workshop, there were 1,187 condos for sale on the MLS, of which 52% were preconstruction. Preconstruction sales clearly play a pivotal role in the Baja real estate market.

However, the actual market of preconstruction units is even more significant, as MLS listings only partially account these units. For instance, a project in Cabo San Lucas has 89 preconstruction condos, which are not shown in the data, representing 86% of its total units.

These numbers only highlight that you are severely limiting yourself if you are a real estate agent and not selling preconstruction.

The question then arises: How do you sell preconstruction responsibly to protect your client's interests and your reputation?

Fletcher and Jonatan explained that while selling preconstruction units offers lower initial costs and the potential for significant value appreciation, it also comes with substantial risks. Issues such as project delays, subpar construction quality, and lack of communication from developers can lead to dissatisfied clients and potential legal troubles.

Therefore, it is crucial for real estate professionals to thoroughly vet developers, ask the right questions, and ensure proper escrow arrangements to safeguard their clients' interests.

We must foster a culture of open communication and shared experiences within our community to identify and avoid unreliable developers. Mike weighed in on how our MLS is taking action in this direction.