Securing pre-sales by moving quickly to deed of sale – Article written by Cédric Doppagne, Chief Commercial Officer

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Friday 16 June 2023

The residential market in Luxembourg is going through a complicated period in a tense economic climate linked mainly to rising interest rates and exit prices.

Many developers are finding it difficult to get off the ground, as the pre-sales rates imposed by certain institutions are not being met. As a result, some reservation contracts are being cancelled because buyers are being offered mortgages with very short terms (usually 30 days). If interest rates rise in the meantime, some buyers are forced to cancel the reservation contract, making the situation even more complicated for the developer.

Eurocaution offers a solution to secure pre-sales by taking action as quickly as possible.

In a rapidly changing economic environment, Eurocaution wants to continue to support the market. To this end, we have adapted our underwriting conditions in order to try, as far as possible, to authorise the issuing of guarantees and the passage to deed even if the traditional pre-sales rates that we have experienced (70% – 100%) are not reached.

Each case is analysed individually in order to propose alternative underwriting conditions that will allow the deed to go through the notary’s office.

In this way, we hope to help our customers to start building as quickly as possible, as starting work on a property increases the chances of it being sold.

There is a lack of confidence among buyers these days, and seeing a building site get under way not only reassures future buyers that the construction is proceeding smoothly, but also gives them a definite delivery date, because they know that if the building work has started, the delivery date (18 to 24 months) can be guaranteed in most cases.

We are currently seeing more interest from future buyers for projects where construction has begun.

In this way, Eurocaution hopes, at its level, to support demand and relaunch the commercialisation of numerous projects.

If you would like to know more about the alternative conditions for VEFA underwriting, please do not hesitate to contact our Sales Director, Cédric Doppagne, on +352 621 261 797 or by email