Things to Consider Before Buying Pre-Construction Condos

Before buying pre-construction condos, you need to understand all costs involved. Closing costs include property taxes, legal fees, land transfer tax, and other charges outlined in the Agreement of Purchase and Sale. There are several things to consider before purchasing a pre-construction condo. If you’re willing to wait for the construction process to be complete, you can often save a lot of money.

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Be sure to know the costs involved:

Before buying pre-construction condos, you should know the costs involved. As with any real estate purchase, you should budget for closing costs. These costs will vary from one pre-construction condo development to another. Also, keep in mind that there is no standardized amount for these expenses – they vary according to contract and purchase price. You should budget for these out-of-pocket expenses before purchasing your new home. If you plan on renting out your unit, you should save enough to pay for the first year or two of mortgage payments.

Be sure to negotiate an “outside” date into your purchase contract:

Even the best developers sometimes experience delays and can’t guarantee move-in dates. So, be sure to negotiate an “outside” date into your purchase contract. If you can’t wait that long, it’s better to skip pre-construction condos. They offer an extended deposit period. 

You should expect a few unforeseen problems:

A newly-built condominium may have some flaws. You can’t expect to anticipate every problem, so you should expect a few unforeseen problems. In some cases, the building’s construction may not be as perfect as you’d hoped. Wooden floors may warp or have missing vents for heating and cooling. Exterior leaks might not surface until after the contract is signed.

Choose a developer with a good reputation:

A pre-construction condo’s cost is higher than a new-construction condo. It’s possible to buy a pre-construction condo for less than half of the cost of a comparable new-construction unit. Choosing a developer with a good reputation is important, which offers a great deal of flexibility. It’s also a good idea to negotiate with past owners.

Buying a pre-construction condo is like investing in the stock market. You buy it at the current price, but you’re betting that prices will rise. A pre-construction condo’s price is like a futures contract. If you’re buying a pre-construction condo, you’re buying it as an investment, which means that it will eventually become an asset in the long run.

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