Presale and Preconstruction are two practical options homebuyers have to consider. For the purposes of this article, here are the benefits of purchasing pre-construction. And, as most of you know, in Toronto there is no shortage of this type of property.
Because you will be the first owner of this home, you will have the opportunity to choose finishes and materials, add personalized elements and tailor your space to your needs. The downside of this is that you are usually looking at blue prints when you’re in this stage, and it is easy to be starry eyed and miss key details like just how much room will be left in your living room after you put those built-ins in.
Most likely, you will not have to do any major construction for the first ten years, but if you were to notice something, you can contact the builders, and they will likely fix it for free.
You will have to come up with a 20% down payment to be able to ensure you are a contender for the home you want. $50,000 can be particularly daunting if you don’t have your finances in order. Whereas with a pre-construction unit, you usually have the opportunity to pay in installments (generally over two to three years) with a smaller percentage needed prior to move-in. And, the beauty of pre-construction is while your home is being built, it is raising in value (barring unforeseen circumstances).
To attract prospective buyers, it is common for condo builders to offer incentives. These incentives can range from appliances to storage lockers and can often be negotiated. So, when looking for a pre-construction, give the builder a call and see what they have to offer.
Things to Consider
There are plenty of benefits when it comes to buying a pre-construction, but also lots to consider. Here are a couple things that you need to keep in mind when purchasing a pre-construction home:
Work with a lawyer: You want to ensure that your choices are legally sound before and after signing any pre-construction home contract. There are loop holes and clauses that you will want considered, and your lawyer will be able to offer you that insight to ensure you make the best decision possible.
Be prepared to wait: It is not uncommon for move-in dates to be extended months at a time. Builders can legally cite “unavoidable delay” situations. According to legalline.ca “if the closing date is delayed beyond the original closing date or properly extended date then compensation may be payable for such delay.”
Budget for closing costs and unexpected surprises: Hiring the right professionals will play a major role in this one. Your real estate professional can help you determine how much extra you will be paying in closing costs. These costs usually include legal fees, provincial warranty programs, title insurance, property tax adjustments and land-transfer taxes.
Are you considering looking into a pre-construction option and have questions? Give us a call! 416.769.3437