As real estate in Toronto and the Greater Toronto Area expands rapidly, you’ve probably seen the signs and advertisements for pre-construction homes and condominiums—and maybe they’ve got you thinking about whether buying this type of property is right for you. We recently did a session with Mortgage Specialist, Olena Vus from Outline Financial and Lawyer, Kate Grossi with Korman and Company so that we can better help our clients understand purchasing new construction.
If you’ve been considering buying a new build, here are some of the benefits.
Avoid a bidding war
Many people think of bidding wars when they think about entering the Toronto real estate market, which can quickly take you to the limit of your budget—or beyond. But with pre-construction homes the prices are set, making the purchasing process a lot less stressful. Buying is done on a first-come, first-serve basis, though, so there is still some urgency.
Spend less
Pre-construction houses and condos tend to be less expensive than resale homes since there’s nothing tangible to buy upfront.
The value could increase
Depending on the market, it could be a few years before the home is move-in ready and your pre-construction purchase could very well increase in value by the time you take possession. You may end up deciding to sell it instead of moving in if there’s a substantial increase.
More flexibility with your money
Since you have the benefit of time with a pre-construction home (you’re likely not moving in anytime soon after purchase), payments are staggered on a schedule until the closing date, so you have more time to organize your finances long-term. Note that in the short term, you likely have to pay more upfront in the form of a deposit.
The chance to reconsider
Unlike with most resale home purchases, buyers have a 10-day cooling-off period with pre-construction builds. This gives you time to review the contract (and have a lawyer review it, too), and really think about the property. If you decide not to go through with the purchase within ten days, your deposit will be returned.
More customization
Normally you don’t have any choice of finishes when you purchase a resale house or condo—you either like it as is, or you don’t. However, with a pre-construction build, you have more options: for example, with a condo, you can often decide which floor you’d like to be on, which view you prefer, or if you want a corner unit. You can also choose upgrades and finishes before it’s built, including floor plan arrangements.
Are you interested in purchasing a pre-construction property? Our team is happy to walk you through the process today.
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