The reservation stage is the earliest phase of a new construction condo sales process — before formal contracts are signed and before the developer has finalized all legal documents, approvals, and pricing.
It allows buyers to hold a specific unit with a small, refundable deposit while the project moves toward its official launch.
Think of it as a “first right of refusal” on a unit before prices go public.
Why Developers Use a Reservation Stage
Developers use reservations to:
- Gauge market demand
- Test pricing assumptions
- Secure early interest
- Build a pipeline before opening sales
- Finalize floorplan mixes
It’s also a way to create early momentum, which helps with construction financing and lender requirements.
How It Works (Typical Process)
- You select a unit (floor, layout, view).
- You put down a small deposit — often $5,000 to $25,000, depending on the project/market.
- The developer issues a non-binding reservation agreement.
- Pricing is usually soft / preliminary at this stage.
- You get priority when the project moves to contract.
The key:
The reservation holds the unit and price tier, but isn’t legally binding.
Is the Deposit Refundable?
In most markets, yes — the reservation deposit is refundable if the buyer decides not to move forward when contracts are later issued.
This makes the reservation stage low-risk for early buyers.
What Happens After Reservation?
Once the developer has:
- Final approvals
- Final pricing
- Official condo documents
They move into the contract stage, often called “purchase agreement” or “sale agreement”.
At that point, buyers must decide to:
- Convert their reservation into a contract
- Pass and get refunded
- Switch to a different unit (if available)
If converting, additional deposit funds are typically due, such as:
- 10% at contract
- 10% at groundbreaking, etc.
Why Buyers Participate Early
The reservation stage gives buyers advantages:
- Early access to best floorplans and views
- Lower, pre-release pricing
- Ability to choose before the general public
- More flexibility to walk away
For popular projects, the best units often disappear before official launch, during reservations.
What’s the Catch?
The biggest limitation:
Nothing is final at reservation stage.
- Pricing can change
- Floorplans may be adjusted
- Timeframes are approximate
Buyers should see it as a soft hold, not a hard commitment.
Reservation vs Contract: Quick Comparison
| Stage | Legally Binding | Deposit | Risk | Flexibility |
|---|---|---|---|---|
| Reservation | No | Small, refundable | Very low | High |
| Contract | Yes | Larger, staged | Higher | Lower |
Who Is This Stage Best For?
The reservation stage is ideal for buyers who want:
- Early selection
- Better pricing
- Low-commitment entry
- Time to review documents before deciding
Investors and early adopters typically love this stage.
The reservation stage is an early, non-binding phase where buyers can hold a unit with a small refundable deposit before contracts are issued. It secures priority access and early pricing without committing to a full purchase yet.
If you’re exploring new construction and would like guidance on upcoming releases, pricing, or reservation timelines, we can walk you through what to expect and help you evaluate your options.
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