Understanding Pre-Construction Purchases
Buying a pre-construction home is an exciting opportunity to secure a brand-new property while benefiting from unique financial and lifestyle advantages. However, it’s a process that differs significantly from purchasing a resale home. This guide will walk you through what to expect, the benefits, and key considerations to help you make an informed decision.
What is a pre-con purchase?
A pre-construction purchase means buying a home, townhouse, or condo before it’s built. You’ll typically buy directly from a developer at an earlier phase of the project. This approach offers several advantages, but it also comes with timelines and processes that differ from a standard home purchase.
What are the potential benefits?
Customizability: Pre-construction homes often allow you to select finishes, layouts, and upgrades, tailoring the space to suit your style and needs.
Price Stability: Locking in the price of your home during the pre-construction phase can shield you from market fluctuations during the build.
Brand-New Home: With a pre-construction home, you’ll enjoy modern features, energy efficiency, and a home free from wear and tear.
Phased Payments: Instead of a full down payment upfront, pre-construction purchases often involve staggered deposit payments, making it easier to manage finances.
Investment Potential: Real estate values often appreciate during the construction phase, meaning your property’s value may increase before you even move in.
The process of buying pre-con:
Choosing the Right Development: Research developers, explore community plans, and attend sales events to find a project that aligns with your needs and goals.
Signing the Agreement of Purchase and Sale (APS): Once you’ve selected a property, you’ll sign an APS. This legally binding document outlines the terms, price, and timeline of the purchase.
Cooling-Off Period: In many provinces, including Ontario, buyers are given a cooling-off period (e.g., 10 days) to review the contract with a lawyer and make a final decision.
Deposit Structure: Developers typically require deposits in phases, such as 5% upon signing and additional amounts at scheduled intervals.
Construction Phase: During this time, the developer builds your home. You’ll receive periodic updates on progress.
Pre-Delivery Inspection (The Welcome Home Session): Before moving in, we’ll conduct a pre-deliver inspection with you to ensure your home meets quality standards and identify any deficiencies.
Occupancy and Closing: When your home is ready, you’ll take occupancy (move in). Closing involves finalizing the legal transfer of the property into your name.
What are some key considerations for buying pre-con?
Timelines: Pre-construction homes can take years to complete. Be prepared for delays that may arise due to construction or market conditions.
Closing Costs: Budget for additional costs, such as development fees, Tarion warranty enrollment (in Ontario), legal fees, and utility hook-ups.
Mortgage Approvals: Ensure your mortgage pre-approval aligns with the projected completion date, as interest rates may change over time.
Tarion Warranty (Ontario): In Ontario, new homes are protected by Tarion’s warranty, covering defects and structural issues. Familiarize yourself with what’s included.
Assignment Sales: Some buyers may choose to sell their pre-construction contract (assignment) before the home is completed. Understand the developer’s policies if this might be a future consideration.
Is pre-con the right option for you?
Pre-construction purchases are ideal for buyers looking for modern, customizable homes and those with flexibility around timelines. If you value having a say in your home’s design and are comfortable navigating a slightly different process, pre-construction can be a rewarding option.
Our Team is Here.
We specialize in pre-construction properties designed to meet the evolving needs of homeowners. From transparent communication to quality craftsmanship, we’re here to ensure your pre-construction journey is seamless and rewarding.
Contact us today to learn more about our communities.