Pre-constructed properties are those offered to home buyers or investors right after the launch of the project. For those looking to buy pre-constructed condos like those in Vaughan Road Toronto, here are some helpful tips to take note of before your purchase.
1. Prepare money for a downpayment
Even if you want to apply for a home financing program, you still need to prepare money for a downpayment. This is the least payment required to close a deal. Usually, this may cost you 10% to 20% of the purchase price. Other high-end units are expected to ask for a higher percentage.
Most of the developers are also asking for reservation fees. This is part of the down payment but is normally forfeited within 30 days if someone decides not to push through with the purchase. It is a form of security for developers to filter out bogus or tripping buyers.
2. Choose your developer carefully
This is very crucial when buying a pre-construction property. According to experts, developers are basically divided into two main categories. First, you have the A-list developers, most of which are listed and have huge capital. Additionally, they have a consistent track and record of success over the years. Therefore, purchasing a pre-construction condominium has almost no risk. These developers are concerned about their credibility and reputations. But you should expect their units to be pricey. Some are totally expensive given that they are offering pre-construction properties.
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Optionally, you have first-time developers, which are doing business against the odds. First-time developers may have no previous record of success in real estate construction. Most of the time, home buyers ignore them in an instant without diving into the details. On the contrary, investors will normally buy units in bulk. When this happens, the total contract price per unit will rise again. A price that is impractical for you to sign up. Therefore, it is important to entertain these newbie developers. If you’re looking for new condos in Vaughan for example, it is always safe to ask for details and analyze carefully. 3. Ask for advice
Sometimes, we are so drawn by the offer and quickly dive into a major purchase. Buying a pre-construction condo means years of commitment. Don’t be too lazy as you might end up settling with less valuable property. Never enter into a contract without double-checking reviews about the company and asking friends and colleagues who might have a bad experience with the developer. Sometimes, there is one black sheep subsidiary in big corporations that can ruin the other one hundred branches. So don’t rely on “generic review.”
4. Check the model unit
Remember that you are buying a unit that doesn’t exist even though the model unit is available for viewing. Developers decor it with the most expensive items and appliances. Don’t fall for it! Ask for the actual model to be turned over. There’s more! It is crucial to check the outside establishments or views on your window or balcony. If your purpose in buying a condo is to have a safe place to relax and enjoy peace everyday, checking the overall aesthetics and ambiance is more than important.
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5. Google map the location
This tip is the least thing you can do. Your high-end interior condo is worthless if it is prone to flood and earthquake. A good location must be accessible to schools, hospitals, workplaces, supermarkets, and roads. Knowing these things will let you make a better assessment of whether to buy or not.
6. Don’t follow the trend
If you are an investor, you don’t plan to buy for residential purposes and must not follow the trend. A real estate trend in a particular place will boost the rising property prices for sale, both pre-construction and ready for occupancy. Therefore, it is advisable to look for pre-construction opportunities off the trend but worth investing your money in. Once again, the price increases once the construction is over. You’ll surely earn a profit from it!
Read more: Decreased pace of housing starts in Canada.
7. Read the contract
Read each word in the contract. Ask for the representative to explain details that are not clear to you. Also, do not forget to ask for copies of the contract you signed once it is notarized. Let the developer’s property agent discuss everything with you. Do not cut them even if you fully understand the contract. It’s a good idea to have a list of questions and expectations to know their response.
Are you still undecided? Feel free to contact a real estate specialist to have a complete guide to buying pre-construction condos.