All you need to know about buying a Pre-Construction Condominium…and some more
Thinking of investing in a pre-construction condominium located within Great Toronto but have no idea how to go about it? You have come to the best possible place because we are about to give you travel nursing jobs charleston sc answers to all the possible questions. The information displayed here is a compilation of inputs from experts in mortgage laws, real estate laws and property sales. In the unlikely event that you have a query which is not featured in the list below, kindly refer to our intermediate and advanced manuals.
At what stage should I involve a lawyer during my pre-construction condo purchase?
Experts suggest that buyers should have a lawyer by their side right from the beginning of the property buying process, especially before the Agreement of Purchase and Sale (APS) is finalized and signed. Though one might argue that the property trade contract terms have now become easily accessible and self-explanatory, there are some minute details which a layman might miss out on. In such cases, having a lawyer helps in cutting down on time and money invested in the process. Also any kind of risk involved can be prepared for or avoided altogether due to the lawyer’s expertise.
The expertise and knowledge of the lawyer protects the interest of the buyer at all times. Also, a buyer who has a lawyer by his side is well aware of the various adjustment expenses that need to be paid towards the end of the purchase and can make necessary provisions for the same.
Buying a condo is a major life decision, financially and otherwise. Hence, services of a lawyer are absolutely essential so that the buyer is informed, aware and cautious at every stage of the buying process.
Why am I being asked for my SIN number before I purchase condo?
The developer who sells the condominium has to keep the deposits received from the buyer in an interest trust bearing account where they remain for around 7 years. Your SIN number is a part of the tax related documents that need to be submitted by the developer when he tries to withdraw the interest earned by him at the end of the term. Having said this, you as a buyer can be assured that this sensitive information is kept confidential and nobody but the developer has access to it.
How should I go about buying a condominium in the initial stages of its launch with the help of a platinum agent?
What sets platinum agents apart from other agents is that they have easy access to the top end condominium projects. This saves the buyers from the trouble of having to line up for the property. Usually, the process of purchasing a newly launched condominium with assistance of the platinum agent involves the following steps:
1. Zero down on the project:
Selection of the most profitable project amongst the shortlisted ones is an extremely pivotal task. Seeking the help of a real estate agent in making the final decision puts the buyer at an advantage over others with regards to the financial viability of the project.
- Pick a suite:
Once the project is decided upon, the buyer must pick работа в москве the best possible suite option after taking into consideration factors like his personal budget, the floor plan and price analysis of the shortlisted suites.
- The Suite Reservation Worksheet:
After the final selection of the suite, the buyer is expected to fill the Suite Reservation Worksheet filled out by and submit it to the platinum agent. The purpose of this worksheet is to specify clearly the suite that has been chosen by the buyer. The contact number for buyer should also be mentioned for any further discussions relating to the purchase.
In some cases, the platinum agents demand an identification from the buyer in order to ascertain the authenticity of the information filled out in the Suite Reservation Worksheet.
Below is a specimen of the Suite Reservation Worksheet.
|Option #||Model Name||Bedroom Type||Special Notes|
|Sample||2D2||1 Bedroom + DEN||Preferred Floor (Example-2nd)|
|Parking Available(Yes/No)||Locker (Yes/No)|
|Legal Name (full)|
|Phone (Home)||Cell Phone|
|Date of Birth|
|Legal Name (full)|
|Phone (Home)||Cell Phone|
|Date of Birth|
It must be noted that simply filling out the worksheet does not make the buyer liable to purchase the suite.
- Suite allocation confirmation:
In the next step, the buyer receives a confirmation regarding the suite allotment. If the buyer affirms that he is still interested in buying the suite, that particular suite is put on hold for him until a date is finalized for the signing of the agreement.
- The agreement:
The platinum agent takes care of all the paperwork involved in preparing the agreement on the basis of the information provided by the buyer in the suite reservation worksheet. This saves time on part of the buyer as the agreement is ready on the date of the appointment.
Usually, numerous copies of the agreement are signed so that all the parties involved have one copy each for their reference.
- The Rescission Period of 10 days:
Lawfully, once the agreement is signed, there is a cooling off or Rescission Period of ten days within which the buyer can reconsider his decision of buying the suite. Within these 10 days, the buyer is permitted to call off the deal without having to pay any penalty charges.
It is recommended that the buyers make good use of these 10 days by having a lawyer go through the agreement for any points or clauses that might not be in favor of the buyer.
Ideally, the process of getting a mortgage broker to pre-approve the purchase should also be carried out during this period.
- Confirmation of the deal and payment of deposit:
Once the Rescission Period of 10 days is complete, the purchase agreement is deemed to be confirmed and the deposit cheque paid by the buyer at the time of signing the agreement is cashed.
Details on the 10 day Rescission Period:
The Rescission Period, also known as the cooling off period, is a time window that has to be allotted by the developer to the buyer so he can study the agreement in detail. The duration of this Rescission Period lasts for 10 calendar (not 10 banking) days.
These 10 days are a good opportunity for the buyers to contact a competent lawyer and get inputs on the agreement that has been signed. With his expertise, the lawyer might be able to point out flaws or points of concern that were overlooked by the buyer. In such cases, the buyer can contact the developer for discussion on the changes to be made in the agreement. This time should also be utilized by the buyer for finding a mortgage broker for pre-approval.
The Rescission Period is of great significance to the buyer as it gives him a chance to opt out of the deal or demand changes in the agreement without any liability.
At what stage of buying a pre-construction condo should I think of getting a mortgage?
As far as condominiums in Toronto are concerned, the usual time between the pre-construction sale of condominiums and their possession is between 3 to 5 years. It is not until the possession that you will require a mortgage.
At the time of possession of the property, the initial amount which was paid as deposit while signing the agreement will be adjusted against the final purchase price. Usually, the deposit amount is around 20% of the total price of the property.
What kind of an agent is referred to as a platinum agent?
A platinum agent is a term commonly associated with agents who undertake the selling of a considerably large percentage of the condominiums in Toronto. Naturally, these agents have the benefit of getting the best possible units and the most competitive prices. Considering the fact that these platinum agents are responsible for the selling of around 10-12 suites in one condominium, they are the best people to go to when looking to buy a pre construction condominium. Following are some characteristics specific to platinum agents:
- Platinum agents usually specialize only in pre-construction condominiums. The percentage of resale properties is either nil or very low.
- The number of units sold by platinum agents in one big condominium is usually over ten.
- The number of platinum agents in Toronto is very small.
- The number of investors with which platinum agents work is very large.
There are more than one advantages of working with a platinum agent. Some of them are:
- They have cordial relationships with developers. This helps in case there is a problem with the developer.
- These Platinum Agents are in touch with the developers since the early stages of the project launch which gives them access to crucial and confidential information. These bits of information can be beneficial while making investment decisions.
- They not only have the liberty of choice with regards to the suites available in the condominium but are also able to strike the best deal for their clients.
What are the processes involved in the launch of a new condo?
Though it is not necessary that every condominium launch must consist of a predetermined set of stages, the procedure listed below more or less depicts the standard processes involved in a condominium launch within Toronto. It must be noted that developers might decide to carry out their condominium launch in a different manner but the procedure will not be very different from the customary pattern. Usually, the developers go on hiking the prices of the property, gradually decreasing and eventually eliminating the incentives are offered to potential buyers.
One can have a better understanding of the changes that take place in terms of price as the launch of the condo progresses from one stage to another with the help of the graph below. It must be noted that the prices displayed in the graph are strictly in order to explain the process and have no connection whatsoever with the prevailing condo prices in Toronto. 2550000
We shall now focus on the stages involved in the process of a new condo launch:
- Invitations to the inner circle of the developer:
In this preliminary stage of the launch of a new condominium, the developer invites his family, friends and other close acquaintances to purchase the new condo. This invitation takes place before the developer has started advertising his project to the general public for commercial sales. Needless to say, the friends and family who opt to purchase at this stage reap the maximum benefits in terms of suite selection and price.
- The entry of Platinum Agents:
Next in line are the platinum agents who undertake bulk selling of newly launched condominiums. The features of platinum agents that make them a preferable sales channel for the developers are:
- The number of investors working with platinum agents work is considerably large.
- Their entire focus is on selling pre-construction condominiums. The volume of resale undertaken is either nil or miniscule.
- The number of genuine platinum agents in Toronto is very small.
Investors buying pre-construction condominiums during the Platinum launch have a number of advantages such as:
- The perks and incentives offered to buyers at this stage are exceptionally impressive.
- The prices during the platinum launch stage are very reasonable.
- The buyers get the widest selection of suites during this stage. This is the reason why the best suites in the condo are usually sold out during the platinum launch stage.
- Launch for VIPs:
VIP agents are different from platinum agents in the sense that the volume of sales undertaken by them in one pre-construction condominium is much lesser than that of a platinum agent. Also, unlike platinum agents, the VIP agents are actively involved in resale of properties. These VIP agents are invited after the platinum launch. The prices at this stage are higher, perks and incentives are lower and there is limited choice in terms of suites as the best ones are usually picked up by buyers during the platinum launch.
- Launch for TREB agents:
The other TREB agents with clients who are interested in buying the pre-construction condominium feature after the VIP agents. By this time, the prices are hiked considerably. Also, there are a handful of suite options available as most of the suites are purchased by this stage.
Some developers are known to add perks at this stage in order to sell off the remaining units. However, these perks never manage to justify the significant hike in prices.
- First call to public buyers:
The interested buyers who have registered themselves on the website of the developer are given priority as the first buyers from the public to be invited. This is the time when the prices are very high and there are no incentives whatsoever. In addition to this, the developer might add certain new conditions which work in his favor. Buying at this stage does not necessarily require the services of an agent. However, it is recommended that the buyer consult a real estate professional who can provide guidance throughout the buying process.
- Invitation to general public
The last avenue for buyers to purchase a pre-construction condominium is by way of public opening. By this time, other buyers have chosen the best suites, enjoyed the most competitive prices and the best incentives. Naturally, there is very little for the public buyers to choose from in spite of paying a huge sum of money. Since investing at this stage is such an unfavorable situation for the buyer, it is said in Toronto that walking into a developer’s office without needing an agent is proof that you have wasted too much time.
Which are the regions where buying pre-construction condominiums is prevalent?
Though people all over the world are investing their money in pre-construction condominiums, this trend has become increasingly widespread in the region of Greater Toronto off late. This new drift in investing pattern is a result of the following:
- The developers of condominiums have to fulfill a series of monetary regulations and it is impossible for them to raise that much money without selling the units in the pre-construction phase. The percentage of suites that are pre-sold in any new condominium is around 70% to 80%. This way, the buyers get an opportunity to pay the current market price for the property which they will claim later.
- The amount of deposit to be paid by investors during the pre-construction period is between 15% and 20% in the region of Canada which is much lower than places like America where the prevalent deposit amounts to 50% to 75% of the property price.
- Since the condominium is going to be newly built, investors can expect better amenities and superior construction quality.
- The investors purchasing pre-construction condominiums get the benefit of being able to invest without paying any interest throughout the construction period.
- The region of Toronto is undergoing considerable development and buying a pre-construction condominium is the best way to cash in on this development.