There are many developments being constructed right now in the North Shore. Do you have any tips for buying a presale condo?
When buying a presale condo enlist the expertise of a REALTOR®. Buyers don't pay for their agents commissions (the developer does) yet benefit from their insights into the process and substance of the contracts which are typically weighted in the favour of the developer. Buyers have to remember that the sales staff at the display centres- while they may be professional, helpful and courteous - represent the developer and the developers interests. A REALTOR® can assist you in preparing your offer and negotiate inclusions and terms which address your specific situation and needs. However, the time to bring your agent into the picture is right at the beginning so that your agency relationship with your REALTOR® is registered with the developer.
The deposit structure for a presale purchase varies from project to project. However, it is reasonable to expect to pay a deposit at the time of writing your offer (Approx $5000.00). This deposit is typically raised to a total of 10% after the first 7 days (the end of the standard rescission period) with a further deposit approximately 6 months later to bring the total deposit to 20 percent of the purchase price. The amounts of these deposits and the total percentage can often be negotiated
Buyers will be provided with a Disclosure Statement which outlines the project and a myriad of details which should be reviewed over the following 7 days which is the standard rescission period where a Buyer can decide if they wish to proceed with the purchase. The Property Disclosure Statement contains a lot of information and it's important to understand it may contain amended bylaws. For example, if the development has commercial space, what are the limitations on what can go into those spaces? Like night club and other types of business that you may not want in your building. This is where your agent can really help! It's extremely important to be educated on what you are planning to purchase into rather than simply focusing on the beauty of the display suite and the dream of living in a new building.
One of the major challenges that Buyers face in a presale is that the construction time frame is often much longer than the suggested completion date given at the time of the purchase. These delays are many times out of the control of the developer and certainly the sales staff who often have the burden of sharing the bad news with buyers. These delays can really cause stress and make moving plans next to impossible. A building in Lower Lonsdale constructed in the last few years had no less than 5 extensions to the completion date putting the project almost a year behind the initial buyer expectations. If you happen to be renting when buying a presale you are in a much better position as you can give your notice based on the dates the developer sends out on the notice of completion which indicates the firm date for your completion (often 30 days before) The inability to predict your final move date well in advance often calls for strategic back up plans for accommodation and financing if you are planning to sell your property based on when you think your new home will be ready.
If you would like more information about new developments on the North Shore or would like my assistance in purchasing your re-sale home, contact me here.