It's a condo boom! Toronto was recently dubbed the "high-rise capital of North America" with a staggering 147 under construction (80% of those being condos) and it seems like the city's skyline changes daily. As the condo market continues to grow, developers are already planning their next big project - attracting potential home owners to the core. As the new condo inventory is set to grow and future buyers looking for the best deal, let's explore whether a pre-construction purchase is right for you.
- Lower cost: Developers offer incentives and discounts - giving you the opportunity to buy a property at the lowest price it will ever be. The earlier you buy into the development the lower the cost. This could be 4 years before the building is complete. Pre-Construction units have been a fantastic investment over the last 5 plus years, with buyers almost doubling their deposit by the time the building is complete. Although they typically have to put down a minimum down payment of 20%.
- Customization: Choosing the materials, layout and design can make your new purchase a dream home - something that isn't easily done when buying a resale unit, unless you want to undertake an expensive renovation project.
- Time to Save: You can plan ahead and get your savings in order while construction goes on.
- Warranties: A new unit lets you take advantage of Ontario’s Tarion warranties. This gives the buyer the opportunity to have any and all issues fixed and repaired by the builder at no cost to the buyer by the builder for one year after occupancy.
- Delays: We've all heard the horror stories. Buildings being delayed by months can make it very difficult on making moving and closing dates with your current living situation. Keep this in mind if you are under certain timelines.
- Guarantees: Sometimes developers and builders can change plans, decor and room sizes at a moments notice.
- Occupancy Fees: You aren't able to make mortgage payments until the building is registered as a condominium and that can happen months after all the units are completed - it's like paying rent on your own home.
- Hidden Closing Costs: It's extremely important to have a lawyer and your real estate agent review and negotiate the closing costs of the new unit. The agreement with a pre-construction purchase is a 50 plus page legally written document that can be very confusing and have many additional fees that must be paid in full upon closing, over and above your mortgage. Closing fees can be in the tens of thousands of dollars and won’t be fully calculated until closing
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