Purchasing pre-construction can seem counter-intuitive when deciding to buy a home or investment property. However, there are some advantages to purchasing pre-construction as well. Before making the decision to buy pre-construction, here are some quick pros and cons to consider.
● No bidding wars compared to already constructed property
● Quality control and management as the build happens
● Possibility for small customizations (for homes, may not be possible for pre-planned condominiums)
● Risky – no way to check quality or visualize the property beyond 3D modeling
● Payment schedule and deposit can be prohibitive to some
● Nerve-racking wait for the construction completion
Like with most things, there are pros and cons to be overcome. Despite that, if you’ve already decided that pre-construction is for you, you’ve come to the right place.
Here are the steps to follow if you want to purchase pre-construction in Ontario.
1. Do some research
At this stage, it is just a matter of looking around for options and deepening your knowledge on the topic of pre-construction. Look more into pre-construction and what it entails, and what are some things to look out for. Here, you can also look into researching the possible locations for the purchase, the brokers in those areas, and even great construction builders and companies.
2. Decide on possible locations
Roughly narrow down on some possible locations and neighbourhoods to purchase your pre-construction. This can also further help in deciding the brokers or agents to talk to.
3. Talk to an experienced broker or agent
Find an experienced broker or agent in pre-construction property and discuss the possible location(s) you’re looking into. Some brokers are well-connected to different pre-construction projects and have an understanding about deposits and pricing – this can help in smoothing out the process.
4. Visit the site(s)
Arrange a visit with potential sites to learn about the area. Keep in mind that construction has not yet been completed and can therefore mean potential future projects that may affect commercial areas.
5. Do some more research (if you have to)
At this point, there might be more research to look into such as builder reputation and completion record. Elements such as reviews might also help. You may also want to dig deeper on whether the location(s) are to your preference, and if you have more than one option, it may even help you narrow down your decision.
And motivation comes from finding you the home of your dreams.
6. Make a decision
This is the tough one. After discussing with the broker and doing any extra research to answer any concerns, it is time to make a decision.
If the decision at this point is to not go through with the particular purchase, no matter – you can always return to any prior steps as required or discuss your concerns with the broker or agent.. If you do decide to go through, continue on to the remaining steps.
7. Discuss and sign the purchase agreement and set up financing
Congratulations! You’re a few steps closer towards owning a pre-constructed property. At this stage, you may discuss and sign a purchase agreement and may have to make a deposit. If on mortgage, setting up the financing would be important.