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Steps To Buying A Pre-Construction Condo
Buying Pre-Construction Can Be as Easy as 1, 2, 3
If you’re interested in purchasing a pre-construction condo, it’s important to know about the process beforehand. This way there are no surprises!
Buying a pre-construction condo is a little different than buying a resale condominium. There are more steps involved, as well as more paperwork, but we’re here to simplify everything for you and make each step more enjoyable. After all, buying a new home is exciting!
There are many benefits to buying something in the pre-construction phase. You’re getting a newly-built condominium suite with new appliances, new amenities and new finishes - it may even be built in a brand-new neighbourhood! On top of all this, appreciation and returns are much higher for new buildings.
10 steps to purchasing a pre-construction condo in the Greater Toronto Area:
First Step’s First: Register With Us to Get Valuable Info Including Reports, Infographs and More!
This is how you can be the first to receive all the latest information about pre-construction condos in the GTA. You’ll be up to date with today’s ever-changing real estate market, and you will be notified of any new sales events or condominium projects that are launching. Once you register you will receive full project details including brochures, floor plans, and price lists.
You will also have access to our invaluable database of information. We can provide info kits, seminars, and one-on-one coaching sessions that can lead you to maximize your ROI and generate a passive income for years.
If the project has not yet launched, your name will be added to our priority list, so that we can let you know once the developer provides us with full details. After reviewing the project materials, you can connect with a GTA-Homes Platinum Agent to go over details or ask any questions.
The Fun Part: Pick The Best Projects & Floor Plans To Maximize Your ROI.
This is definitely one of the most exciting parts of your condo buying journey. This is where you and your platinum agent look through the floors and suite styles of different projects to determine what would be the best fit for your lifestyle or investment.
Don’t stop at just one. The key to finding a pre-construction that you’re happy with is to pick a variety of floor plans that suit your tastes. This doesn’t mean you should settle, but the reality is that supply is limited and we can’t guarantee you’ll get every unit you want. Give us a call to chat about the pros and cons of each floor plan you’re considering, we may have some insight that surprises you.
Work It: Submit A Worksheet.
Once you’ve decided on a suite type, size and price range, we’ll get you to submit a worksheet. The sooner you do this, the better.
What‘s a worksheet? A worksheet contains your personal information and your suite preferences. You submit this document to your agent along with a government issued ID to request a unit. It doesn’t mean you’re buying a unit quite yet, it just means that you’re interested in purchasing a condo and would like one to be allocated to you. Your worksheet will be submitted and time stamped accordingly. A GTA-Homes sales representative will guide you through this process.
Start Getting Excited: Time to Sign the Agreement.
A few days after submitting your worksheet, you will receive a phone call from a GTA-Homes sales representative with an update. If you have been allocated a suite and would like to proceed, we will book an appointment at the sales centre to start the sales process and sign the Agreement of Purchase and Sale (APS).
When the signing event arrives, please come prepared on the day of signing with your Government-issued photo identification and your chequebook. You will not be able to buy a suite without these items. The GTA-Homes platinum agent will guide you through the signing process and answer any questions you may have at this time.
Keep It Cool: The 10 Day Cooling Off Period.
After the contract has been signed with the developer comes a period commonly referred to as the "10 Days Cooling Off Period." By Law, you legally have this period to review your purchase agreement. You are 100% protected during this period and the unit is on hold under your name for those 10 calendar days.
We strongly recommend you take this time to find a lawyer with experience in pre-construction purchases to help you review the contract. You can also get your mortgage pre-approval or commitment letter in place with your financial institution. It’s not necessary at this stage, but it’s best to be prepared.
If you change your mind during the 10 calendar days or decide you are not satisfied with the contract, you have the right to cancel it at this time with no questions asked. There will be no financial penalties and your post-dated cheques returned to you. If you choose not to proceed, please bring your purchase agreement and other documents to the sales centre, where you will sign a rescission letter.
Covering Your Bases: Get Pre-Approved.
Now it’s time to get your mortgage pre-approval or commitment letter in place. Remember, as the building is not registered yet you can’t register a mortgage officially. Connect with a GTA-Homes sales representative for help with this process if you need.
Things Are Heating Up!: Cashing the First Cheque.
But if you ARE satisfied with the purchase agreement after the 10 days, the contract is firm and the first deposit cheque gets cashed on the 11th day after signing.
Congratulations! Your deposit cheques will be processed accordingly. Please make sure to have funds in your account on the specified dates that were provided to you in your sale agreement. You will receive a receipt every time a cheque has been cashed.
Make It Your Own: Design Your Suite.
While the condo is under construction, the developer’s décor centre will be contacting you to pick your suite colours, finishes and offer any upgrades. This is the time to turn your condo unit into the home of your dreams.
It's Yours!: Interim and Final Occupancy.
There are two closing dates during the process, the Interim Occupancy stage and the Final Closing stage. This also means that you will meet with your lawyer twice during the closing phase.
You'll first meet your lawyer when the developer reaches out to inform you of your Interim Occupancy. Be prepared to make any outstanding deposits and occupancy fee payments at this time. Please note that during the Occupancy Period you still do not own your suite. Your mortgage or final payments will not occur until the Final Registration date.
We also advise you to contact your lender approximately one year prior to your occupancy date and have your mortgage approval letter updated to avoid any increased interest rates.
The second time you'll meet your lawyer will be shortly before the final closing date to sign all the documents and officially transfer the ownership of your suite to you. Your mortgage will commence and your lawyer will explain all of the outstanding costs to finalize the purchase. Don’t forget, your GTA-Homes platinum agents will guide you through the entire process.
Lease It Out: Building Positive Cash Flow and Building Equity.
It's time to lease out your new condo unit to someone in need of a home. You can strategically charge rent so tenants cover your monthly carrying costs including your mortgage, maintenance fees and surplus, this is where you can generate positive cash flow. By letting a tenant pay down your mortgage, you're allowing the overall value of your condo unit appreciate while you've only invested a net of 20% on the original price. This is how you generate a positive cash flow and long term equity growth.
Are you nervous about finding a tenant to lease your new condo unit? No problem! We also offer Property Management services so we can take care of all the heavy lifting of leasing your new suite.
It’s that easy. So what are you waiting for? Start your home buying or investing journey and register today!
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