Buyers of pre-construction condos in Toronto hate unpleasant surprises. All you want is to have a comfortable place to live in or invest in to make an income.
When buying a property, paying hidden charges and changes in the contract are the last things you want to encounter. You want to make the most out of your investment and acquire the property in the smoothest possible way.
Learn what you might encounter when buying pre-construction condos in Toronto to eliminate some of your worries. The following points are vital to know if this is your first time buying a pre-constructed condo in the area.
What to Expect When Buying Pre-Construction Condos in Toronto
Knowing what to expect when you buy a new property can help you plan and hire the right people. You will be more careful in signing an agreement, be more understanding with the builders and the processes of taking over a new property.
Here are some things to keep in mind:
“Material Changes” Are Possible
Review any contracts, disclosures, or any agreement that gets into your hands. It could contain last-minute material changes that may surprise you or include terms different from the original deal.
These changes may require you to pay more and result in you feeling disappointed when your property does not turn out the way you expected. The Condominium Act protects you from these kinds of changes.
However, not all changes are avoidable. You should provide leeway to the builders as some changes are unavoidable due to the complication of construction projects, such as changes in the amenities or structure.
You need to consult the agreement with a real estate lawyer to help you understand what constitutes a material change and what does not.
You Have a Cooling-Off Period
Even if you have signed a contract or paid a part of the deposit, you can still get your money back without any liabilities because of the 10-days cooling-off period. The 10-day cooling-off period is a mandate in Toronto that gives you time to make a final decision whether you want to pursue the construction of the condo or not.
Note that this period is only applicable if you are buying from a builder. It does not apply to other home purchases.
These 10 days include weekends, making this period a short time to make a life-changing decision. To make the most out of it, hire a real estate lawyer to help you review the agreement. You can also use this time to ensure that your bank or mortgage broker has approved your financing.
You Do Not Immediately Own the Condo After You Move In
The property is not yet yours once you move in. In Toronto, the property transfer between the builder and the buyer undergoes the process called Interim Occupancy.
Interim Occupancy refers to the time you move in until the day you take full possession of your unit. This period may last from 3 to 17 months, where your property is still considered under construction.
This period allows the builders to finish the construction process and ensure that the proper transfer of the property takes place.
Down Payment Cost Can Be Expensive
The down payment for the deposit is a bit different from buying resale condos. With resale condos, you need to deposit 5% of the purchase price. But with pre-construction condos, the deposit cost is 20%.
The deposit price for pre-construction condos in Toronto is higher than buying resale condos, but the good thing is you can pay it in installments. The price and frequency of each payment depend on the payment structure you’ve agreed on with your builder.
For example, you can pay $3,000 upon signing a contract and then pay 5% of the purchase price in 30 days, 5% in 90 days, 5% in 180 days, and 5% for occupancy.
Delays Are Normal
Builders can give you a rough project timeline, but do not expect them to stick to it fully. Construction is a huge project that is prone to various issues that cause delay.
Be prepared to wait for months or years before it is complete, especially during this pandemic. To eliminate delays or make sure the delay is worth the wait, work with an experienced agent and a trustworthy developer.
There are many pre-construction condos in Toronto. That is why we understand your doubts, and we know how difficult it is to find which one will be the best investment for you. Keep these tips in mind to ensure a smooth flowing transaction with your builders and to get the best return for your money.
If you have any questions on pre-construction condos in Toronto, contact BCR.