Presale Condo and Townhome Experts
Things to know about buying a presale. Our Presale Condo and Townhome Experts are here to answer your questions and guide you every step of the way.
What is a Pre-Sale?
A pre-sale occurs when a developer sells a property to a buyer before the construction or completion of that property. Buyers who invest in a pre-sale secure the right to own a future completed property. Investors and other buyers favour pre-sales because they enable price appreciation without the immediate financial responsibilities of a mortgage, property taxes, maintenance fees, or the challenges of managing tenants. Pre-sales also offer owner-occupiers the opportunity to personalize the property they are purchasing.
Three Key Factors about Pre-Sales to know about:
- Buyers of Pre-Sales have the right to cancel the purchase contract for any reason within seven days after an accepted offer, thanks to a BC Provincial Law known as the “7-Day Rescission Period.” You can terminate the deal during this period, whether due to financing issues, personal concerns, or even a change of heart.
- All deposits made by the buyer for a Pre-Sale are securely held in a lawyer’s trust account. These funds remain untouched until the construction of the building is completed or if the developer fails to meet the specified construction deadlines. The developer cannot access these funds until the project is finished. In the event of the developer’s financial difficulties, the money held in the trust account remains separate from bankruptcy proceedings and must be returned to the buyer.
- The Disclosure Statement contains crucial information about the property you are purchasing, including details about the size of your unit, what will be included in it, and the building’s design. It is essential to thoroughly review this document to ensure you clearly understand your purchase.
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Are Pre-Sales Legal?
In the Province of British Columbia, Pre-Sales are subject to regulation under the Real Estate Development Marketing Act and are generally considered safe when purchased from a reputable developer. You can contact the Home Owner Protection Office if you have any doubts or inquiries regarding the developer.
Some Advantages of Buying a Presale Condo or Townhome
- Selection & Customization: Purchasing a condo during the pre-construction phase offers owner-occupiers a unique opportunity for variety and customization rarely found in the resale property market. You can tailor your new condo to your preferences and layout.
- Newness: Many buyers relish being the first owner of a product. Presale condos guarantee all mechanical and other systems in their initial stages, promising reliable performance without needing repairs or replacements for 15 to 25 years.
- Low Ownership Costs: Newer properties are typically more energy-efficient than older ones, resulting in lower utility expenses for completed presale condos. Furthermore, during the Warranty Period, the likelihood of significant maintenance fees or large assessments to repair the building is minimal, helping to keep ownership costs in check.
- Simplicity: Owner-occupiers can secure their future home with a modest deposit and continue residing there until the presale condo is ready for occupancy. The developer’s 1-year warranty typically covers any issues with the newly completed property.
- Financial Leverage: Buying a pre-sale in a rising real estate market can financially benefit owner-occupiers. Purchasing at a lower price point during pre-construction may allow the buyer savings on mortgage insurance premiums.
- Warranty Protection: Owner-occupiers can enjoy peace of mind, knowing they are protected by the BC Government-administered 2-5-10 year warranty program, which covers various aspects of the property over time.