Buying New Builder Condominium?
March 1st, 2011
Mississauga Toronto Pre-construction condos-New builder condos
Newly constructed condos can be a good option when buying your condo. Normally, you may have to wait a couple of years before moving into your Mississauga or Toronto new condo. Newly constructed building offers new home warranties (transferable), fresh appearance, greener/energy efficiency, modern fittings, latest amenities, high speed elevators, latest appliances etc. while providing buyers to choose their finishes and upgrades.
As a first time buyer or an investor you can purchase a Mississauga Toronto new condo from the developer either before (pre-construction) or during its construction and well before the condo corporation is formed. Sometimes developers may have some unsold units available after the condo has been completed and registered. There can also be opportunities to buy assignment of purchase and sale agreement in projects. Real estate professional; someone working in condos market, can play an important role in helping you buy new builder condos at pre-construction prices. They can also help you comparison shop inventories of different builders, at no cost to you.
But there is more you need to know
On a negative side, you cannot "see" what you are buying and you must rely on artist sketches and floor plans (which may change); your initial deposit will be tied up for the duration of construction (you will earn some interest on this deposit); your financial position may change at the time of occupancy, that can affect closing the sale; construction of your unit may not be completed by the expected date; you may move into your unit while construction continues in other units-this can be noisy and disruptive; you may not be allowed to flip or lease your condo during the interim occupancy period and your condo may loose its value if the real estate markets plummet.
When someone buys a new condo, the developer typically provides the purchaser with a disclosure statement. However, if a purchaser reads the document, he or she may not understand the implications. These documents must be reviewed by lawyers. Failure to spend a few hundred dollars on lawyers could results in having to shell out thousands to the developer at a later date.
My point is that you should know exactly what you are walking into and make an informed decision, when purchasing a pre-construction condo.
What should your first step be
Feel free to consult with me before you invest your hard earned money into any Greater Toronto Area or Mississauga condo projects. With hands on experience in dealing with many new builders, I will be able to help you.
Working with me means more benefits for you
As your real estate broker, I Work for You and Not the Builder. I refer you to real estate lawyers to review builder's documentation before your deal firms up (within 10 days cooling off period).
Your lawyer goes through the builder documentation, disclosure statement, and agreement of purchase and sale to ensure that your interest is protected. It is very important for you to do your due diligence through your lawyer and tax advisor. Their advice will help you in making an informed decision.
There can be many hidden costs that you may not be aware of. Lawyer points out these out of ordinary expenses and may ask the builder to cap some of those costs if not already capped.
Builder's closings costs can add thousands of dollars to your closing costs, if not looked into at the time of buying.
These costs can include-utilities meter charges, government levies, TARION warranty fees, parks and municipal charges, PST on appliances, builder's construction financing discharge fees, legal fees, education or transit development charges, proportion of development charges paid by the builder to the city.
Buyer do not pay any fees to me
The price to buy your new builder condo using my services is exactly the same as going direct to the property and buying it from the builder's sales people. You will not pay any fees to me or my brokerage (same are paid for by the seller/ builder).
What you lose by not working with a condo focused broker
- By not working with a professional condo focused broker/salesperson, you will miss out on the opportunity to be at the exclusive pre-launch event which is by invitation only and reserved for REALTORS® and their preferred clients.
- You may stand to lose out on the low rates, better terms, choice of floor plans etc. offered only at some of these events. Rates normally move up after the broker's preview. You would then be buying as any other regular member of the general public.
- By not working with an experienced condo focused broker/salesperson as your buyer agent, you will likely miss out on many aspects that help you to make an informed decision.
- You could lose out on guidance and advice around builders' reputation; comparable data on different projects, best models, floor plans, room sizes and views to choose from etc.
- You might also miss out on your chance negotiate some special terms in the contract that a novice buyer may not be aware of.
- Sometimes developers may create media hype about their condo projects. This is followed by a flurry of activity from the public, real estate agents and their clients, all anxious to buy a piece of real estate that seems like "the best deal in town". Developer sales people create an atmosphere to induce buyers to commit right there and then; it sounds as if there is no better deal, and everything is selling out etc.
- By not working with your own condo focused real estate professional, someone who is working for you and not the builder, you may simply get swayed by all the marketing and end up paying much more than what you should.
- Remember, you do not pay any commission to work with me to buy a new condo. The price to buy a condo is same in both the cases. But you stand to lose a lot by not working with a condo focused real estate professional.
There are more benefits for you!
When you work with me you get turnkey solutions, right from the project selection, to the suite selection, to help in choosing interiors, doing pre-delivery inspection; if required, followed with leasing your suite, tenant selection, and later selling if you would need.
Some key questions that I will help find answers to:
- What is included in the price?
- Is there any extra cost to purchase parking or locker?
- Any extra monthly fees for locker or parking?
- Do you own your parking/locker or you will you just have exclusive use of them?
- Are there any special provisions to limit noise between units?
- How are the units heated, cooled and ventilated?
- Who will pay for the utilities?
- What are the amenities (like indoor pool, sauna, indoor golf etc.)?
- What is included in the condo fees?
- How is condo fee calculated, is there a price per square feet?
- How are odours controlled?
- Is the building energy-efficient?
- What options are available for suite wall and floor finishes, cabinets and fixtures etc.?
- What are condominium rules regarding pets, BBQ on patio/terrace etc.?
- What are the condominium rules in regard to leasing suites?
You should also be aware of the view from your unit, especially in a new development or when the building is as a part of a larger complex. Be sure to ask about the future construction plans for adjacent open areas. Your view may change significantly with the construction of a neighbouring high-rise.
New home warranties are offer by TARION. This warranty is transferable to the owner buying newly built condo from the resale market.
Buying resale condos in Mississauga
I am often asked about the difference in buying new and resale condos.
The biggest advantage of purchasing an existing condo is that you get what you see. You can see the building and grounds, your unit and demography of people living in the condo before you buy.
Your lawyer will go through the status certificate and financial documents of the condo corporation. After looking at these documents, he can tell you if the condo complex is well maintained and managed, whether or not the condo in question is right for you.
I sell both new builder and resale condos in Mississauga and will be happy to assist you in your condo buying, selling and investing needs. Consult with me to receive objective information, unbiased advice, tips on choosing best suites, new builder information, compare new vs. resale, find out vacancy rates, rental incomes, property taxes, condo fee and incentives for first time buyers.
If you are considering buying a Mississauga or Toronto condo nearing its completion; directly from the builder's unsold inventory, check with me first. Once 70%-75% of the project is sold out builders often increase prices by approximate 5%-10% for all balance inventory. Builder offers more incentives however; there is a considerable difference in pricing from their initial release.
Chances are that I may find you a better priced comparable unit from the resale or assignment sales market.
