| Decision | Whether a discounted group sale can fund the next phase |
| Key figures | Price per lot, required principal payment and dated site-work costs |
Before accepting a builder’s offer for several lots, calculate the required release payment on each parcel at the discounted price. Then subtract selling costs and compare the cash remaining at that closing with the next infrastructure bill. A faster sale can bring in cash sooner while leaving too little to start the next phase.
Identify where the release formula changes
Read the partial-release provision and the schedule for the specific parcels. One agreement might set a fixed amount per lot. Another might require the greater of a minimum and a percentage of gross proceeds. Confirm how the contract defines proceeds, how the purchase price is allocated across lots and whether a group sale needs approval. The lot release price guide explains the underlying mechanics.
Assume a hypothetical agreement requires the greater of $105,000 or 75% of the gross price of each lot. The two amounts are equal at $140,000 per lot ($105,000 ÷ 0.75). Below $140,000, a further discount reduces the sale proceeds while the minimum principal payment stays at $105,000. These terms are invented for the calculation.
Four individual lot sales versus one discounted closing
A builder offers $135,000 each for four identical finished lots at one closing. The developer’s alternative is selling them individually at an assumed $150,000 each over time. Assume selling costs equal 5% of gross in either case, the development debt exceeds the release payments and there are no other deductions in this comparison.
| Four individual sales over time | One group sale now |
|---|---|
| Gross proceeds: $600,000 | Gross proceeds: $540,000 |
| Selling costs: $30,000 | Selling costs: $27,000 |
| Principal repayment: 4 × $112,500 = $450,000 | Principal repayment: 4 × $105,000 = $420,000 |
| Cash remaining: $120,000 | Cash remaining: $93,000 |
The group closing delivers $93,000 now. The individual sales would generate $27,000 more cash in total if they close as modeled, and repay $30,000 more principal. They may also require months of additional interest, taxes and upkeep. Put those costs and dates into the individual-sale case before deciding.
Will the proceeds cover the next construction start?
Suppose the next utility installation requires $110,000 immediately after the group closing. Even if all $93,000 can be used for infrastructure, the phase is $17,000 short. Ask whether proceeds must first replenish an escrow or fund unfinished improvements. Each additional restriction reduces the amount available to start work.
Before committing to the sale, discuss financing for the next phase with Stonehaven. Give the location, number of lots or homes, expected closing month and the work the proceeds need to fund.
What if the builder wants to close in stages?
Put each group of lots on its own line with its closing conditions, release amount and estimated net cash. A deposit can remain in escrow, and a future purchase can depend on permits or acceptance of improvements. Mark when the cash actually becomes available. Compare that timing with the contractor’s deposit and start date.
If you intend to retain a lot and build on it yourself, the cash moves differently. See how the first construction advance can fund a lot release. For a sale, ask the development loan holder for written release figures by lot and send the closing professional the agreed allocation before setting an unconditional delivery date.
The OCC handbook on commercial real estate lending explains how principal payments as lots sell protect the remaining collateral. The example here tests a hypothetical contract formula. Your release schedule and closing instructions govern the actual transaction.