The demand for a pre-constructed condo in Toronto has seen an upward trend in the past few years. It is because buying a condo is a more affordable option in most of the cases in comparison to a freehold home, especially when talking about the core of the city.
It is a common myth that investing in a condo that is still in its development stage will have you stuck throughout your life. While this may be so in many cases but not true for all. When you buy it from top-rated realtors, you will be less likely to encounter inconveniences as they will ensure to adhere to their timelines as closely as possible.
Investing in a pre-constructed condo is beneficial for single families looking for brand new homes with modern and upgraded amenities.
Since buying a pre-construction condo is an expensive investment, it is the responsibility of the buyer to make a radical decision which is worth every penny.
For individuals considering this type of investment, here are few tips to help you through –
Inquire about the Deposit Structure
The condos require the buyer to pay some percentage of the total value as a down payment. For a resale condo, it will be 5% down payment whereas, for pre-constructed condos, it is quite high as 20%. However, this amount need not be paid immediately or all at once. There is a deposit structure provided by the vendor where you will be given enough time to make your first payment.
Your vendor will inform you if you have to deposit the amount in the first year itself or the payment will be spread out over a period of time.
Look out for the 10-Days Cooling Off Clause
In Toronto, usually, all the pre-construction condo sellers give the benefit of ‘10-Days Cooling Off Clause’ to the buyers. During these 10 days, the buyers have an option to withdraw their purchase and get their whole deposited amount back from the seller/vendor.
This time period provides a good opportunity to consult your lawyer and get your purchase agreement reviewed. You can also double-check for the mortgage approvals during this time span. If you secure a lender, then well and good, if not then be quick in responding and withdraw your purchase.
Be Prepared for a Few Changes and Delays
You have to keep in mind that the timelines given by the condo builders are just approximations. There can be unexpected delays or changes due to bad weather, shortage of material, strikes in the industry, etc. And for that, the builder cannot be blamed. Even the most reputable builders can encounter delays in delivery of projects due to unforeseen reasons.
Although an estimated time duration is always provided in the agreement, it is always better to be prepared for a few months delay in the completion of the project. Also, after completion, there might be few changes that could have been implemented during the course of the project, whether the addition of more floors or changes in layouts.
However, buying from a reliable builder who is backed by years of experience will ensure that you get exactly what you signed up for and if any changes may happen, it doesn’t affect your purchase price.
Expect Increase in the Maintenance Fees
The pre-constructed condo buyers are required to pay some amount for maintenance of their building. This fee is usually set before the construction starts and is quite low.
The running costs take the actual turn when the building is completed. With the inflation in effect, the rate of everything increases and so does the cost of maintaining the building. So, always consider this aspect before making your final call.