What you should expect when you are buying a pre-construction condo? This is what I am
going to talk about right now. Hello this is Sushma Khinvasara and welcome
back to my channel. If you are considering a pre-construction condo purchase there are
many things to look for. Buying a new builder condo is a lot different from buying a resale
condo. Here is a rundown of what to expect. Number
1. Deposit payment: When you’re buying pre-construction condo, you’d be thinking - how much deposit
payment is the builder asking? Typically, developers will ask for a 20% deposit and
this is spread over multiple installments over a period of a couple of years. For a
first-time home buyer this can be perfect, because you don’t have to pay all of the
deposit upfront. Number 2. HST: You may have to pay HST since
new-build condos are subject to HST, however your purchase may eligible for the New Housing
Rebate program. More so if you will be moving in after closing. Just check with legal or
tax professionals if you are qualified for this rebate. Number 3. Other charges: There
are other fees to be aware of such as Tarion New Home Warranty, utility hook-up fees, occupancy
fees, lawyer fees, and development and educational levies, if applicable. Closing costs are different
for every pre-construction condo and there’s no set amount of closing costs for every condo.
Number 4. Condo fees: Condo fees or maintenance fees are charged to every condo unit owner
for the maintenance of common areas. Condo fees generally tend to rise slowly in the
first few years as the building is new. Number 5. Purchase Price: Pre-construction may look
to be more expensive than resale condo. But think about it; you’re buying at current
market value for future payback and with gradual deposit payments.
Number 6. Potential delays: There is a risk of potential delays and changes since a pre-construction
condo project takes 2 years or more to complete. Plan to move in six months later than the
original move-in date but have a backup plan in case delays push into the one-to-two-year
mark. Preconstruction can come with surprises so be flexible. But these potential delays
and changes may be worth the wait. Number 7. Home Warranty: All new buildings
go through a period of settling in their first few years and may result for instance, minor
cracks or nail pops. This will cause blemishes to surface during post-construction but don’t
be disappointed. The builder will send someone to fix that since it’s covered in your home
warranty. Remember to just follow the process set out by your builder. In Ontario, builders
must provide home buyers with a third-party warranty. Another warranty to protect a home
owner is the Tarion warranty. For most condominiums, warranty coverage also includes the shared
areas of the building, referred to as the common elements.
Number 8. Cooling off Period: What’s great about pre-construction is that you can change
your mind. You have ten calendar days to reconsider your decision after the date of signing the
agreement to purchase and sale. This is according to Section 73 of the Condominium Act, people
in Ontario who buy a pre-construction residence directly from a home builder are granted a
cooling-off period. If you decide to withdraw from the purchase agreement, you’ll receive
your deposit back with no penalties. Number 9. Colour selection: Another thing
I love about pre-construction condos is that it can be upgraded according to your taste
or liking. Part of the appeal of buying a pre-construction condo is the option to select
your colours and finishes. You get to pick and choose the upgrades and finishes. Just
ask the builder on what are the upgrades available. Number 10. Amenities: Another reason to go
for pre-construction condos is the amenities provided by the building. Many pre-construction
condos offer swimming pool, gym, theatre, party room, outdoor recreation area and most
of them are conveniently located near neighbourhood amenities. Maybe they are located near schools,
shopping centres, public transport, and parks. Knowing what to expect and doing some homework
before buying a pre-construction condo will avoid unexpected surprises.
I hope you found this information useful. Hit the like button if you did, add your comments
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video.