If you're living in Toronto than you've likely seen the signs for the new condo buildings that are on the way. Usually before a single brick has been laid they are advertising that some of the units inside have already been sold. From a Scarborough condo to a new townhouse village, some homebuyers are always looking for the latest trend and best new design. In order to stay on top of things that means buying a preconstruction property. If you're thinking of buying a new home or condo that's yet to be built, here are some tips and questions you should ask yourself before making any purchase.
Buying a home in its preconstruction stage is usually the best choice for investors or those that are thinking about the resale value of their home and are planning to sell again in the next few years. Whether you're looking at a downtown loft or an Edmonton condo for sale many of the units being sold in advance are bought at a discount by people who plan to sell again within the first year of the building's completion. The reason this is so appealing to investors rather than regular homeowners is that the investors don't need to worry about the small details catering to their tastes. While with preconstruction homes you will be shown architectural designs and drawings of what the interior is meant to look like, things might change throughout the building process.
But, as previously mentioned, buying a home in preconstruction usually does come with a discount over the cost of the same property once it is complete. This is to compensate for those small adjustments that might need to be made between the original design and the final product. Another advantage of buying preconstruction is that you usually don't have to pay for the home all at once the way you would for a standard listing. You might need to pay about five percent up front and then make additional payments throughout the building process. The final amount will need to be paid when you take possession of the completed property. This could mean that you have up to three quarters of your home paid for on move-in day.
You also need to keep in mind that there is risk involved in buying a preconstruction property. There is the chance that the building will not be completed on schedule and sometimes not even be completed at all. You also don't know how well the building will sell when it is done and there are drawbacks to living in a complex that is half full. You should definitely take this into account before investing in one of the condo units.
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