Buying a pre-construction condo is different than buying a resale unit. It's a whole different process. Although there is a lot more paperwork and steps involved, there are many benefits to buying one before the units get released to the public. Appreciation and returns are much higher for newer buildings for starters. You're also getting a new unit, which you likely customized the finishes for, along with new appliances and amenities. We'd like to help simplify everything for you so that there aren't any surprises when it's time to buy.
1. Find the right agent and start looking for the perfect project.
The best way for you to start your journey of buying a pre-construction condo is to find an agent you'd be happy to work with. Ideally, you'd want to find someone who knows how this specific sector of the real estate market works so that they can give you the best advice and information on the process. You're Realtor will be able to find information on the latest projects are the areas that you may be interested in. If the agent has access to the VIP launches, you'll definitely be able to get yourself ahead of the crowd with regards to the pricing and the availability of units.
2. Picking the floor plan.
Once you have found the right condo project for you and it has its VIP launch, your Realtor will go over the various floor plans with you. You'll be able to find out what some of the pros and cons could be for specific plans. This can always change depending on if it's for an investment or for your personal use. When going through the floor plans, you'll need to have a few options that are suitable for your needs. With supply being very limited, it may be able to secure your top choice.
3. Signing the agreement and the 10 day cooling period.
Once a worksheet has been submitted, time stamped and accepted by the sales we will schedule a signing appointment. This is where the excitement begins! You'll need to bring a valid ID as well as your chequebook with at least 5 cheques. Once we are ready to sign, our assigned sales office representative and I will go through the agreement with you and answer any questions you may have.
Once the contract has been signed and executed by the developer, your 10 day cooling period begins. This law was implemented for you to be able to review your agreement of purchase and sale. During this time, the unit is on hold for you for the 10 days. It is recommended that you find a lawyer that understands the agreements from pre-construction condos. You should also get a mortgage pre-approval from a financial institution that you are comfortable with. Many developers will like to have a copy of this sooner rather then later.
If you change your mind during the 10 days, you have the right to cancel the transaction. There are no financial penalties and your post-dated cheques are returned to you. You will need to bring any documents that were given to you at the time of signing and at that point you will sign a rescission letter. The unit will then go back into the inventory and likely get signed by the following day as there is usually a waiting list for those who were not as lucky to secure a unit right away.
4. Firm deal and your deposit cheques.
On the 11th day after your purchase, the deal becomes firm. Your initial deposit cheque will get cashed and the waiting begins. Make sure that you have the funds in the account that the cheques belonged to, by the specific dates set out in the agreement of purchase and sale. You will receive a receipt for every cheque after they are deposited.
5. Designing your unit.
At some point during the condo's construction process, the decor centre will reach out to you. This is your chance to personalize the unit and make it your own. You'll be able to go through all of the colour options, finishes and looks throughout the unit. There will be endless options for upgrades as well. During this step, I'd be more than happy to go with you to help you with some items that may or may not be worth the cost associated with the upgrade.
6. Interim occupancy and final closing.
There are two stages to the closing process.
The first is called interim occupancy. During this stage, you will meet with your lawyer and provide any outstanding deposits that may need to be paid. Although you still don't own your unit, you will begin paying occupancy fees. This is usally made up of your mainteance fees, interest only of the outstanding balance and a portion of property tax. The fee will be paid until your unit is registered.
The second stage is the final closing. You will once again meet your lawyer to finalize your registration and transfer ownership to you. This is also when you will pay any extra costs such as land transfer tax, closing fees and your lawyer fees. Once all of this is completed, congratulations, you are officially the owner of a new condo!