Buying a Pre-sale Condo or Home? Here’s What You Need To Do
Are you thinking about buying a pre-sale condo or home? If so, you're not alone. Many people across Canada buy pre-sale properties each year. In the Vancouver market, where new construction happens regularly, it's typically not challenging to find these properties. For people looking at moving to Vancouver, these homes are a great option to consider. You can customize your home or condo to make it yours, something that's much more expensive to do with existing real estate.
Many people think buying these properties is as simple as putting a down payment and taking possession of the home. However, there are a few other things that buyers of pre-sale units should know. Here's a (brief) guide to buying a pre-sale condo or home in beautiful British Columbia!
What Is a Pre-sale Property?
Any home for sale, but the developers have not built yet, is a "pre-sale" home. You'll typically get a lot more customization with pre-sale homes and condos than you would get with existing real estate. Most developers offer different floor plans, materials, countertops, or perks like custom wiring for a stereo system. While you could, in theory, buy an existing home and customize it any way you want, it's often more expensive to do than getting the place built the way you like it to start.
What Are the Steps To Buy a Pre-sale Condo or Home?
The general gist of the process is the same as buying an existing home. You'll typically need 20% down and have to qualify for a mortgage (unless, of course, you're paying for the property with cash). However, buying a pre-sale home has some additional steps that existing homes don't.
The buying process is different. First, get a real estate agent. Although you can, in theory, buy new construction without an agent, having someone familiar with the market and builders in your corner will make the process much smoother. Plus, it's a second set of eyes to help you through the process and ensure that everything looks good.
Typically, you'll sit down at the company's sales office and review computer renderings or architectural blueprints. You'll discuss the various floor plans, customizations, and so on for your new home. After you agree on the floor plan, layout, etc., you'll typically sign a development agreement with the builder, which will finalize the details. Typically, you'll pay 5% down and then have to put the remainder down over the next 12-18 months.
Before signing this agreement, make sure that you and your agent do some thorough reviewing of the company. Ensure the builder has a stellar reputation and that they have a history of delivering on time. If you don't, you could wind up regretting the purchase.
Wait for Your New Home
After signing the purchase contract and making the necessary payments, the next step involves waiting for construction to finish. During this time, you'll have to obtain the mortgage. Make sure you budget for closing costs, which will be due once construction ends.
When the company has completed the home, you'll do a predelivery inspection (PDI). At that point, a representative from the company will walk the buyer through the property, showing them everything they need to know. You and the builder will note anything that needs fixing. After the inspection and repairs, if necessary, you'll get your warranty on the new home.
Move Into Your New Place
After the inspection, the builder will schedule a move-in date, at which point you can take official possession of the property! The new construction will officially be yours!
If you're interested in new construction or what else is in the Vancouver area, please contact me! I'd love to work with you to find the right pre-sale condo, home, or even an existing one that will suit your needs.