How Pre-construction Payment Plans Work

In a pre-construction purchase, when you need to pay can be just as important as the price of the property. Two plans that appear similar can require very different amounts during construction and at the final due date.

This guide explains how to read payment plans, calculate a schedule of amounts due and check which conditions need to be clear before committing your money.

1. Reservation deposits, advance payments, down payments and balances

Although these terms often appear in real estate offers, they are not interchangeable. Before paying, confirm how each is defined in the transaction documents.

• Reservation deposit: an amount paid to request that a unit be reserved for a specified period. Ask how long the reservation lasts, how the amount is credited toward the price and what the cancellation terms are.
• Advance payment: a payment toward the purchase. For transactions covered by NOM-247-SE-2021, the provider must issue a receipt and explain in advance how the payment will be applied and the conditions for a refund.
• Down payment: the initial amount that forms part of the price in installment or credit transactions, where applicable.
• Installments: payments spread throughout the development period according to specified dates or milestones.
• Final balance: the remaining amount payable on the agreed due date. This does not necessarily coincide with physical handover or the execution of the title deed.

NOM-247-SE-2021 sets rules for advance payments, including crediting them toward the price when the sale is completed, information about the refund procedure and the absence of a penalty when a refund is requested within the agreed period. The conditions of a reservation deposit must be reviewed in light of its nature and the document signed; you should not assume that every refund clause is valid.

Ask about these details before reserving and retain receipts and payment instructions.

2. What 10/90 and 30/40/30 plans mean

The numbers describe how the price is divided, but they do not, on their own, specify the exact dates. These must appear in the payment schedule and the relevant contractual documents.

• 10/90: an initial 10% payment and a 90% balance, payable on the agreed due dates.
• 30/70: an initial 30% payment and a 70% balance.
• 30/40/30: an initial 30% payment, another 40% during construction and the remaining 30% on the final due date.

If a plan says “90% on delivery,” ask what the seller means by delivery, which document establishes that deadline and what happens if construction is delayed. Do not assume that payments will automatically be rescheduled.

3. Payment schedule: a practical example

Suppose a property costs $4,000,000 MXN and offers two payment options. The total price is the same under both; only the timing of the payments changes.

How much is due at each stage?

Plan A requires $800,000 MXN less upfront than Plan B, but leaves a final payment of $3,600,000 MXN. Under Plan B, the buyer will have paid $2,800,000 MXN —70% of the price— before the final due date.

This difference matters because it changes both the liquidity you need and the amount of money committed while the developer still has outstanding obligations.

4. Discounts, currency and total cost

Some developments offer discounts for paying part of the price early. To compare them, request a quote for the same unit under each payment plan and check how long the offer is valid.

For example, if a price of $4,000,000 MXN receives a hypothetical 3% discount, the saving would be $120,000 MXN and the price would be $3,880,000 MXN. Before choosing it, ask how much you must pay upfront to qualify for the discount and which conditions could cause it to expire.

• Final price: confirm whether the discount actually reduces the total and how it is applied to the scheduled payments.
• Currency: if the price is quoted in dollars or another currency, check which currency you must pay in and the contractual conversion rules.
• Additional costs: request an estimate of title deed and closing costs, taxes, appraisals, fees and any other applicable charges.

An attractive discount does not remove the risks of committing money upfront. Weigh the saving against your liquidity needs.

5. Mortgage financing and payments during construction

If you plan to cover the balance with a mortgage, check financing feasibility in advance. Prequalification does not guarantee final approval: your financial circumstances, the property and the bank’s requirements will also be assessed when you apply.

NOM-247-SE-2021 states that failure to obtain credit approval, or approval for an amount insufficient to cover the price, does not in itself constitute a breach attributable to the provider. This does not automatically determine what happens to your money: cancellation, possible refunds and other consequences must be reviewed under the contract and any applicable rights.

Before signing, ask what happens if your mortgage is declined, the approved amount is lower than expected or the date for signing the title deed changes.

What is the risk of paying during construction?

Under Plan B in our example, $2,800,000 MXN is paid before the final payment. This does not mean the arrangement is wrong; it means a significant part of your assets will be committed while the project is still underway.

When a plan includes payments during construction, review construction progress, contractual terms, available documentation, the consequences of possible delays and whether payments depend on dates or verifiable milestones.

If you are considering significant amounts, obtain independent legal advice before taking on those obligations.

6. What to confirm in writing before paying

A sales table or a WhatsApp conversation does not replace the transaction documents. The plan must correspond to the exact unit you intend to buy and remain consistent with the contractual terms.

• Total price, currency, discounts, validity period and included items.
• Purpose of each amount: reservation deposit, advance payment, down payment, installments and balance.
• Amount and date —or verifiable milestone— for every payment.
• How payments are credited toward the price and the refund procedure, where applicable.
• Consequences of delays, cancellation and breaches of contract.
• Conditions relating to financing, physical handover and execution of the title deed.

The NOM-247-SE-2021 governs information obligations and various aspects of advance payments, down payments and contracts in the residential transactions to which it applies. Where applicable, also consult Profeco’s Public Registry of Standard-Form Contracts.

7. Checklist before choosing a payment plan

Before reserving a property, check these seven points:

Our team specializing in pre-construction properties in Puerto Vallarta and Bahía de Banderas can help you compare payment plans, check current terms and organize questions for the developer. For financing and contract assessments, also consult the relevant professionals.

The best plan is not necessarily the one with the lowest down payment: it is the one whose amounts, due dates and conditions you can take on with a clear understanding.