Buying a Pre-Construction Condo; What You Need to Know

By: Andrew Presta

Buying a Pre-Construction Condo; What You Need to Know

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Pre-construction condos are an enticing purchase for many homebuyers. These properties are still in the planning or development phase, which can give buyers a chance to snag a unit at a lower price point and sometimes before they are even listed on the open market. However, there are a few things to consider before buying a pre-construction condo. To help you better understand this, we thought it would be helpful to put together a brief discussion on pre-construction condos. If this is something that you’re interested in, read on as we break down everything you need to know about buying pre-construction condos.

 

What is a Pre-Construction Condo?

 

Pre-construction condos are properties that are still in the planning and development stages. They have not been built yet, which is why they are also often called "pre-construction properties." Buyers can purchase a pre-construction condo and hold onto it until it is finished, at which point they can either move in or sell it for a profit.

 

The main appeal of pre-construction condos is that they are often much cheaper than finished properties in the same area. This is because the developer has not yet put in all the work and incurred all the costs associated with building the condo. Buyers can often find discounts of 10% to 20% off the final sale price.

 

Another advantage of pre-construction condos is that you can often choose your own finishes. This means that you can select the flooring, cabinets, and countertops that you want in your home. You can also choose the layout of the condo and the view.

 

Keep in mind that there is some risk associated with buying a pre-construction condo. The property may not be finished on time or it may not be built at all. In some cases, the developer may go bankrupt and the buyer will lose their investment. For this reason, it is important to do your research before buying a pre-construction condo. Make sure you know what the developer's track record is and read the contract carefully to see what protections you have in case of a problem.

 

What Do You Need to Consider Before Buying a Pre-Construction Condo?

 

When you're considering purchasing a pre-construction condo, there are a few things you need to take into account. Firstly, you'll need to think about your budget – how much are you willing and able to spend on a condo? Keep in mind that pre-construction prices often increase as the development nears completion, so it's important to factor in potential price hikes when making your decision.

 

You'll also need to decide on a location. Do you want to be in the heart of the city, or would you prefer a suburban setting? Consider your lifestyle and needs when making your decision – for example, if you frequently travel for work, you'll want to be close to the airport.

 

Finally, you'll need to do your research on the development itself. What are the builder's credentials? What are the current (and future) amenities and features? How are the units priced and what are the size and layout options? By doing your due diligence, you can ensure that you're making a sound investment in a pre-construction condo.

 

Should You Buy a Pre-Construction Condo?

 

If you are comfortable with the developer, the location, and the price, then buying a pre-construction condo can be a great investment. Remember, there are pros and cons to both buying a pre-construction condo and buying a completed condo. Some people may find the process of buying a pre-construction condo to be more stressful, as there is a lot of uncertainty surrounding the development.  However, if you are able to find a good development and the prices are right, you can save a lot of money. 

 

Sold With Presta are experts in residential and commercial real estate, helping individuals buy and sell in the Greater Toronto area. If you are looking for real estate agents to help you buy your dream home, work with us today.