Pre-construction purchase refers to the buying of a property that has not yet been built or is currently under construction. This type of purchase is also known as off-plan or pre-sale purchase. In this scenario, buyers purchase a property before construction is completed, based on the developer’s plans and designs. Pre-construction purchases are becoming increasingly popular in the real estate market, especially in areas where land is limited and demand is high.
One of the main advantages of buying pre-construction is that the buyer can often secure the property at a lower price compared to the market value of a completed property. Developers may offer discounts or incentives to buyers who purchase during the pre-construction phase, making it a cost-effective option for those looking to invest in real estate. Additionally, the buyer has the chance to customize the property to their preferences, choosing finishes, colors, and features that suit their needs.
Another advantage of pre-construction purchases is the potential for appreciation. As the development progresses, the market value of the property may increase, providing the possibility of a significant return on investment. This is especially true if the development is in an area that is experiencing growth and development, with rising demand for property.
Pre-construction purchases also offer a longer timeline for payments, making it more affordable for the buyer. The buyer may need to pay a deposit upfront and then make periodic payments as the construction progresses, allowing them more time to arrange for financing and make payments.
Point 1
When considering a pre-construction purchase, it is crucial to research the builder before making any commitments. Choosing the right builder can make a significant difference in the success of the project and the satisfaction of the buyer. Here are some reasons why researching the builder is essential and some steps to take to ensure you select the right one.
Our team of experienced professionals can provide you with the highest quality advice to ensure a successful purchase with A Rated Builders.
Point 2
The purchase agreement is a critical document in the process of purchasing a new home. It is a legally binding contract between you and the vendor, outlining the terms and conditions of the transaction. It is highly recommended that you have a lawyer review the agreement before signing it.
The Tarion Addendum is an essential part of the purchase agreement, and your lawyer can help you understand its contents. This addendum includes information on closing dates, potential delays, and associated fees and costs. Your lawyer can also explain what happens in case the agreement is terminated and how your deposit will be protected under the Addendum.
Having a clear understanding of your purchase agreement and the Tarion Addendum can help you avoid any unexpected surprises and protect your interests throughout the home buying process. It is important to work with a qualified and experienced lawyer who can guide you through the legal aspects of the transaction and ensure that your rights and investment are protected.
Point 3
In Ontario, new homes are covered by the new home warranty and protection plan, which includes coverage for workmanship, materials, Ontario Building Code violations, water penetration, and defects in the structure and systems of your home. This coverage is divided into one-year, two-year, and seven-year warranties, and it is essential to understand the defects and conditions that are covered during each period.
Point 4
Prior to taking possession of your new home, you will have the chance to inspect it alongside your builder to ensure that everything is in order and nothing is missing, damaged, or unfinished.
It is advisable to review Tarion’s PDI Checklist in advance of your inspection so that you are aware of what to look for. Although the PDI Checklist is a general guide, it is recommended that you include your own checkpoints that are specific to your property and its unique features.
Point 5
If you are buying a new condo, it is important to be aware of certain aspects of the purchase process. For instance, you have a 10-day cooling off period under the Condominium Act, during which you can cancel the sales agreement. It is advisable to use this time to review the purchase agreement and disclosure statement carefully.
In some cases, you may move into your new condo before the project is completed and registered. This is known as interim occupancy, and it is important to discuss it with your real estate lawyer. Your lawyer can advise you on condominium ownership, monthly payment of interim occupancy fees, duration of interim occupancy, and other rights and responsibilities during this period. Being informed and prepared can help you navigate the condo buying process with confidence.
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