Buying Pre-Construction - BRING AN AGENT

Bring a licensed agent

Sometimes buying a pre-construction condo can be a good idea. Many times, it's risky and it's a bad idea. 

How can anyone know what will happen 3-5 years into the future?

How do you make a good decision and what should you look for in your purchase? Ask a licensed agent. 

BEFORE you go to the builder sales centre, speak to a licensed agent, and make sure to go together on the first visit.* 

So why is that though? Here are 6 reasons: 

1) your agent SHOULD BE LICENSED, and therefore working for your best interest, not for the builder. 

2) repeat - a builder sales rep is working for the builder, not for you. They will give you a booklet, show you a nice building model, and will give you a price list and inventory sheet. These are units they release periodically. 

3) a builder sales rep is typically not licensed. They sell you units that are released at that moment in time. Sometimes better units come up later (for more money). They might want to sell you the one that is the hardest to sell. You know, the one above the garage or garbage entrance, or has low light or a weird layout, maybe with a column or two. 

4) a licensed agent will ask the builder reps about closing costs (and making sure they are capped at a fixed amount on closing), development charges, assignment privileges (ability to sell your contract to a new buyer if your situation changes), will try to negotiate upgrades if available, and any other questions you need to know. 

5) a builder rep will take you through the process to buy, but may not get specific on the consequences if things change in the future.. for example, interest rate increases, builder delays, mortgage challenges, builder extortion fees before closing, and proper referral to lawyers. 

6) CHOOSE A REPUTABLE BUILDER WITH A TRACK RECORD OF SUCCESS OVER A LONG PERIOD OF TIME. Your licensed agent should know who they are, and if they don't, choose an agent with experience in pre-construction sales. 

*if you don't bring your licensed agent on the first visit, the builder typically won't pay a commission and subsequently your licensed agent will not be able work for you in the transaction, for your best interest. 

Buying A Condo, Think About Resale

Toronto Condos

There are certain things to consider when buying a condo. 

One of the most important things to know when buying a condo is actually not just the unit or the actual building, but focus on the resale potential. 

Make sure it has what the next buyer will want: 

• a nice view
• an open balcony
• not above the garage entrance or garbage area
• not beside the garbage chute

It is also important to get as much square footage that your budget allows. If you can get the den, get the den. If you can afford the 2nd bedroom, absolutely get the 2nd bedroom. 

In the future, space is sparce, and people in the future will pay to have more of it. 

Builders are always building smaller units, so get as much as you can today. 

Bidding Wars

Bidding Wars

Bidding Wars - people hate losing them, people hate winning them. 

Buyers hate them, Sellers love them. 

There's something unsettling about being in a blind-bidding situation and having no idea if you are close, far, or bidding against yourself. 

The overall outlook should be to remember your budget, and be willing to walk away if you are near your max. 

Every bidding war has a different chance of success, and several factors will determine the chance success, including the area and the starting list price (whether it is very low or priced at market price). 

After December 1, 2023, Sellers will be able to decide if they wish to disclose the contents of offers, but Buyers will not be able to make that decision for themselves. 

Buyers should understand their budgets and not get swept up in the emotional whirlwind of winning. 

The other factor is whether your mortgage lender will have a different opinion on the purchase price, so make sure that your Offers are likely to appraise (your Agent should be able to guide you with pricing), and be prepared to deal with appraisal fallout if more cash is needed. 

Communication is key here, and good discussion about strategy before you submit your offer is recommend.