LAND DEVELOPMENT
Takedown schedule vs absorption pace
A takedown contract commits a builder to buy finished lots on a fixed schedule. This checks that schedule against the pace lots actually sell, so you can see the quarter standing inventory starts to build and renegotiate before it does.
THE MATH
How it's calculated
Absorbed per period = sales pace × months between takedowns. Surplus per takedown = lots per takedown − absorbed per period. Months to sell out = lots ÷ sales pace. Months to take down = (lots ÷ lots per takedown) × months between takedowns.
WORKED EXAMPLE
Given: A 120-lot phase selling 6 lots a month, with 20 lots taken down every quarter
Result: Sales absorb 18 lots a quarter against 20 taken down, so inventory grows by 2 lots a quarter. The phase is fully taken down in 18 months and fully sold in 20, peaking at 12 standing lots.
QUESTIONS
Takedown schedule calculator questions
What is a takedown schedule?
The clause in a lot purchase agreement that sets how many finished lots the builder buys and when. Miss a takedown and the deposit is usually at risk. Take down more than you sell and you carry inventory and interest you did not plan for.
What sales pace should I use?
The community’s own closings, once you have three or four months of them. Before that, use comparable subdivisions in the same submarket at the same price band, and re-run the schedule every quarter as real numbers replace the estimate.
How many months of standing lots should I hold?
There is no single right answer. The trade-off is simple: enough finished lots to keep models and specs moving, few enough that you are not carrying a year of ground and interest. Set the target first, then negotiate the takedown quantity that holds it.
What does this calculation leave out?
Seasonality, development timing — a takedown cannot close before the lots are finished and the plat is recorded — price escalators, and interest carry. Treat the output as the planning line, not the pro forma.
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