When buying a pre-construction condo, you can purchase a unit that seems attractive to you and then take the extra time to confirm your decision, without the risk of losing money or the unit you have selected.
In Ontario, you have a legally protected time-based rescission period (popularly known as the 10-day cooling off period) to consider and finalize your decision. It starts when you sign and submit the initial purchase agreement and tie up a unit you like. You can then start reviewing and analyzing the details to determine if it’s the right purchase for your needs or investment objectives. During the 10-day “cooling-off” period, if you change your mind for any reason the developer will simply release you from your contract. There are no strings attached and no fees incurred.
However, just because you can change your mind without any repercussions, doesn’t mean you should just make it a habit to sign up for units in projects all over. You should be properly prepared before you start making selections. You should consider a lot of variables that help you make both a great selection and an informed buying decision.
Here are some points/variables you should be considering:
Do some initial online research on the location. What makes one location better than another (close to transit; neighbourhood; future prospects; land availability).
Type of condo project you are considering. Example: luxury project, or a regular functional condo unit.
The length of your condo investment. Are you planning on assigning your contract to another buyer before the project is registered or are you planning on rent it on the longer term and benefit from property appreciation?
Look for a quality experienced Realtor to represent you. Talk to an experienced realtor so he/she can shed some light on the pre-construction condo buying process. It really is different from buying resale properties. Most developers work directly with Platinum/VIP Agents who can get you access to units before the project opens to the public. These agents can get you the best selection, the lowest price point and time-limited incentives.
Make an appointment with your mortgage broker so that you can get a feel for how much you can afford and whether you’ll qualify for a mortgage. There’s no point in buying a condo for $500,000 when you will only qualify for a mortgage to buy a $450,000 condo.
If you following through and do your homework before jumping in, it’ll not only help you make the right decision, it should help you make the right real estate investment choice.
Talk to me – I can help!