Buying a presale condo or townhome has some great benefits. The value of your home may have increased during the time it is being built. It comes with a 2-5-10 year warranty which protects you against certain repairs or deficiencies. It has all of the finishes and fittings you personally picked out and it’s brand new!
But what else should you know before committing to the purchase of a presale condo or townhome?
The Layout Or Unit May Be Slightly Different Than You Expect.
When you purchase a presale unit, often you don’t have an opportunity to see the exact unit you want to have built. Beware of slight variances during construction, and ensure you understand what the variance allowance is in your Contract of Purchase & Sale, as well as the Developers Disclosure Statement. You don’t want any unexpected surprises as construction progresses and you can’t back out if you don’t like it.
Seven (7) Days Cooling Off Period
With presale homes in BC, the Buyer has seven (7) days after the Offer is signed and accepted to change their mind without penalty. After seven (7) days, the deal is firm and legally binding on both parties. Make sure to read the Disclosure Statement provided by the Developer, or have your Real Estate Agent go over it with you. If you have any questions or concerns, it may also be beneficial to speak with an attorney.
GST
All presale homes are subject to 5% GST in addition to the purchase price. This is due at completion. First-time buyers may obtain a rebate of 36% of the GST payable if the home is priced under $350,000 or a lower rebate may apply for homes priced between $350,000 and $450,000.
Market Changes
All real estate markets fluctuate, some more than others. You must be aware before committing to the purchase, that if the price market drops before completion, you’ll still be legally required to close on the deal. On the upside, if the market has increased by the time construction is done, you’ve already gained equity in the home because it is now worth more than you originally agreed to pay.
Delays In Construction
Presale condo and townhome projects rarely complete when the Developer originally expects them to. Make sure you have a backup plan in place on the chance you may not be able to move in until a month or possibly many months later.
Hire Your Own Real Estate Professional
Securing a realtor who specializes in Presale Condos or Townhomes can be a great benefit to a Buyer. They understand the ins and outs of dealing with Developers, they can advise you on some of the benefits and pitfalls of purchasing a presale unit, and they can assist with negotiating and paperwork preparation on your behalf. And since they represent you, they have your best interests at heart. Even if you’ve previously bought and sold the property, buying a presale unit is a different experience and it never hurts to have someone knowledgeable and experienced in your corner.
If you decide to purchase a Presale Condo or Townhome, contact presalesbc.com and speak with our qualified, professional team. We’re here and happy to help.