Buying Pre-Construction Condos and Homes

As you already know, all of GTA is booming with new construction, starting from residential condos to houses, and commercial space. This is a unique sector for investment as it has a different dynamics and sale process. When considering a purchase of pre-construction condo or home for sale, here are a few points to bear in mind.

When buying directly from builders, they impose their own sales agreements that are lengthy and have some grey areas, especially pertaining to closing fees that are determined at the end, before closing.

Usually, inventory offered to consumers is what is left after VIP Broker Launch events where Realtors were given attractive incentives from the start to bring qualified buyers.

The upside: when buying a new construction, buyers usually have more time till closing which gives them time to slowly leverage assets for down payment. Most builders require 25 % percent down payment over a span of 3 years. In some cases the buyer may assign the sale of a unit/house before closing, make some profit, without incurring additional closing fees, and financing.

Now, some people get fascinated with beautifully drafted catalogs and construction plans on paper. However there are some important questions to pose before finalizing such purchases.

What is really being built there? Is the builder going to complete the project? It looks good on paper and catalogs, but what might happen once they start building? Quality? Will I still have the view or something else will be built in my backyard/under the balcony? How much down payment do I need and where do I start? Can I get out of the contract? Can I use my basement in my newly built house for a home business? Is this a viable long term investment for my needs?

DO I EVEN NEED A REALTOR?

The answer is: YES, YOU DO.

To help consumers address most of these questions, we exercise careful due diligence by inquiring about specific details from a variety of sources. I personally call various departments of the city hall in Toronto, Richmond Hill, North York, on a regular basis to find out about specific projects, long term and short term plans for specific areas, expansions or restrictions that might affect the future enjoyment of the proposed property.

As realtors who work for Buyers at no cost to them, me and my partners offer a detailed analysis of new building projects based on clients’ needs such as commute, demographics, long term investment vs short term investment, potential rental income, resale and appreciation, comparison to other similar projects and making the right decision.

Most importantly, Toronto Real estate board closely cooperates with many builders, especially the reputable ones. We have early access to builder projects through Toronto Real Estate Board website and VIP Broker events where clients are offered price incentives and best value for their purchase.

Now, consumers may directly approach the builders as well and be offered what is usually left after broker launch events. Note that most builders cooperate with brokers: this only translates into more favourable sales agreements such as better upgrades, special discounts that are only available to members. Despite some common belief, the price of the new construction does not get negatively impacted if buyers walk in with their realtor.

In conclusion, we are committed to represent our clients’ best interests both in pre-construction and resale transactions and deliver the service they deserve.