In the urban pre-construction real estate world, “business as usual” can look a little different, depending on where you’re signing deals.
Take, for example, worksheets and reservations.
Commonly used in major North American markets, including Toronto and Miami, worksheets and reservations are designed to make life easier for both buyers and developers. Typically, worksheets are favoured by Toronto developers, and reservations are more often seen in Miami.
Choosing your unit and watching the building literally materialize from the ground up is the best part for pre-con buyers. Naturally, the discerning urban buyer has specific preferences from the get-go — whether they have to do with views, square footage, or accessibility. This is where worksheets and reservations come into play.
While they take different approaches to assigning pre-con units, they do share a common denominator: a happy end-user.
Worksheets And Reservations: An Introduction
“They both accomplish very similar things,” says Matt Harrison, Product Manager, Spark Real Estate Software. “The goal is similar; it takes the onus off the sales team and transfers that to the agents and buyers who, in cities in Miami and Toronto, have a lot more leverage.”
Widely used in Toronto – the so-called “crane capital of North America,” where condo development applications flood the City weekly – worksheets essentially serve as “wish lists” for pre-construction purchasers. Potential homebuyers request and rank their top choices in terms of suite preferences. Agents submit these, on the clients’ behalf, to the builder. From there, developers basically draw upon these requests to allocate suites.
Meanwhile, in Miami – an ever growing city that’s seen an explosion of development (and new residents) in recent years – developers typically rely on reservations. In high-demand developments, some units are more coveted than others, and are simply available on a first-come, first-serve basis. Reservations, however, allow potential buyers the opportunity to reserve specific units before they become available to the general public. In South Florida, most reservations ask for a fully refundable 10% deposit on the condo unit’s price.
So, while similar in purpose, worksheets and reservations differ in practice. “The key difference in the experiences I’ve seen is that the worksheet is collecting IDs and acts as a submission form; it’s more of a standardized document than a reservation is,” says Harrison. “Reservations collect a deposit in a formal transaction and contract. Worksheets gather information via detailed forms that will eventually translate into a contract, but are a bit less of a commitment on the buyer’s end.”
The Benefits Of Both
Worksheets improve the chance of a happy purchaser by reducing the likelihood that they’ll have to compete for a unit. They’re designed to be simple and seamless for all parties involved, especially thanks to new tech and digitization.
Worksheets – while significant – don’t make for a high-pressure decision on the part of the buyer; it’s not a contract, nor a commitment. Should a potential buyer decide to purchase, worksheets simplify the process by allowing developers to collect digital copies of the ID — and potentially other documents (for example, bank drafts) — which can expedite contracting later on. For condo developers (who, let’s be honest, have a lot to deal with these days), using worksheets offers insight into the degree of interest among buyers and agents, as well as an idea of which units to allocate to which launching broker partner. While a worksheet doesn’t guarantee an agent will be allocated a buyer’s first (or even second) choice, it does help.
Like worksheets, in condo buying, a reservation is generally a non-binding — but still significant — agreement, set between a potential pre-con buyer and that property’s developer. While a deposit may signify seriousness in a buyer, it remains fully refundable. Reservations are typically offered at the very beginning of a project, giving buyers the advantage of getting in while prices are at their lowest.Furthermore, this timing forces developers to provide purchasers with the best possible value for their dollar.
Like their counterpart option, reservations help developers (and their salespeople) understand if their pre-construction project appeals to the market. Furthermore, reservations can have an impact on tweaking design plans, if specific units are of high demand.
Reservations Vs. Worksheets
Simon S. Mass, CEO of The Condo Store Group of Companies, has experience using both worksheets and reservations — and personally prefers the former.
“I am not a fan of reservations, as they are just placeholders for a potential transaction many months down the road,” says Mass. “Frankly, I think it entails far too much effort for the purchasers, as well as the salespeople handling the developer sales for a site. In my opinion, if a developer has a project but isn’t ready to enter into sales, I think it’s best to wait, and then put the product and opportunity out there [for] buyers and, if they engage and purchase, work within the typical parameters as it relates to rescission periods.”
Worksheets are a different story, says Mass. “A worksheet, to me, is a sale,” he says.
All of this said, a buyer may have a (very) different perspective.
Reason-being, on the purchaser's side, a reservation translates to a more likely chance of ending up with the precise unit you want. With worksheets, there aren’t always guarantees you’ll get your first (or, again, even your second) choice.
So, which option comes out on top in this competition may very well depend on who exactly is keeping score.
The Tech Advantage
Historically, using worksheets was seen as a more daunting process, with lots of paperwork and tracking — no fun for purchasers, not to mention office admin staff.
“You would literally write down on a piece of paper which units you want, or input it all into a spreadsheet,” says Harrison of the outdated worksheet process. Today, simplifying technology may be the ultimate decision-maker when it comes to a buyer’s completing any preliminary submission, regardless of the type.
Technology can assist in the quick gathering of submissions, and in building an optimal customer experience. For the developer, modern systems allow for the organization of all worksheets and reservations in a central hub. Today’s leading real estate tech also facilitates easy analysis of demand, to help allocations or processing of reservations.
“Both worksheets and reservations require a centralized control hub, to collect and store data associated with each,” Harrison explains. “On the reservation side, it would be the process of collecting purchaser information and sending out the reservation agreement, along with any other documents, for the buyer to sign and send back over. It would intake the deposit information to process within a centralized application."
"For worksheets," he continues, "it’s the delivery and intake method of: sending out those worksheets and having a centralized hub to receive them. Then, your team can action them, depending on the priority they’re putting on each request.”
For developers, the shift to worksheets and reservations is a more enticing one thanks to companies like Spark — and specifically, the company's new Request Forms feature. Their answer to traditional worksheets, Request Forms are just one feature in the company’s suite of forward-thinking sales and marketing tools. For the new addition, the keyword is customization: Request Forms allow for the creation of custom worksheets, which can be sent out to brokers and purchasers to collect key personal details and copies of IDs, while also allowing them to submit rank selections on units.
“Everything is in the same place, from digital contracts to email marketing,” says Harrison. “Request Forms allow for easy comparison with other data in terms of suite allocation — what people want, and what’s selling the fastest.
While big Toronto developers have relied on tech-fuelled worksheets for some time, the secret is officially out in other markets. “We have clients in Vancouver, New York, Texas, and Denver who are finding out about the worksheet and reservation process, and they’re starting to ask questions about bringing it to their cities,” Harrison says. “We’ve noticed a lot of interest from non-traditional and unique markets that want to make their suite allocation process more efficient.”
The team at Spark hopes that, when it comes to implementing new pre-con resources, cities can learn from one another and hopefully share best practices — because the results will be beneficial for all parties.
All that will be left for buyers to do is sign on the digital line.
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This article was produced in partnership with STOREYS Custom Studio.
