Buying New and Presale Condos or Townhouses in BC, Canada has both advantage and disadvantages for buyers.
What Is A Presale Property?
When you purchase a presale townhouses or condo you are buying a property which is not built yet. A presale is when the developer(s) offers condos, houses or townhouses for sale before construction has started or before the construction is complete.
- Deposit(s) will be required upfront prior to completion.
- Presale Developments require that you pay the full price, however you will not need to start paying a mortgage until you take possession.
- The deposit can/will range from 5 to 10% of the purchase price, and further 10 to 15% increments throughout the building project.
- Your deposit will typically be held in a trust account owned by the developer until the building is completed.
- If for any reason the developer does not finish the building, the full amount will be returned to you as per contract of purchase and sale.
Buying A New Home Or Presale Condo May Not Be As Easy As You Think.
Buying a house, townhouse or condo isn’t like buying a car, boat or new shoes. It’s a big investment with many different parts to the sale. For even a seasoned investor some properties take patience and experience to make a good purchase.
Many people who are not active within the market watching the market daily do not understand why some areas are selling faster than others even though the news says “Vancouver Real Estate is slowing.” A local neighbourhood expert who is seasoned in real estate sales will be able to help you with which areas or “hotter” than others and which ones you may have more time to make a decision before they are all sold out!
Purchase Process For A Presale Property Taylor’d VIP Access
VIP access may not be necessary these days as the market is not necessarily as hot as it was at the peak of the market. However, certain developments may require the VIP access especially if you are interested in niche properties such as Penthouse Condos for sale, End Unit Townhouses, Presales for retirement living, etc. Here is a rough guide as to what to expect when purchasing a presale or pre-construction property in the lower mainland of BC Canada.
- Contact us and sign up for Taylor’d VIP Presale Registration.
- An agent will contact you finding out about your goals and what you are interested in so they can better asses how to help you obtain your goal.
- You will then be added to our shortlist for developments of interest and then we will keep you updated with floor plans and price range lists, development maps, info on amenities, and much more.
- Once the developer has confirmed access to the sales/display centre for early previews an agent will contact you to let you know about early preview appointments.
- For most VIP appointments the marketing company or developer will need to see a copy of a bank draft from you (Typically the draft needs to be made up for $10,000). This is to show you are serious about the development and your purchase.
- During the VIP appointment, you will likely meet the sales manager representing the developer who can answer all of your detailed questions in person. They will also have a scale model and large touchscreens with all of the building visuals.
- Usually at the VIP pre opening appointments the developer/marketing company is waiting to get the disclosure statement. According to city bylaws developers cannot sell any presale units without this. We appreciate and stress your patience in this matter. A contact and price can still be negotiated with your unit in mind and once the disclosure statement is received we can schedule a purchase appointment and go in to sign the contract making the purchase official.
- The Purchase Appointment: You will need to bring the $10,000 bank draft and/or a personal cheque for the remainder of the initial 10% deposit (minus the $10K draft which will only be cashed if, at the end of the 7 day rescission period, should you decide to move forward with the purchase of your presale property). You will get a copy of the disclosure statement and your contract of purchase and sale. The 7 day recession period is the time to review the contract with your family, friends, accountant, lawyer, mortgage specialist, etc to be sure about the purchase and your ability to move forward with it.
- Then you wait. Typically after about 6-9 months, you will be required to deposit a 2nd deposit and again at 6-9 months after that you will have to deposit a final deposit.
- Then you hurry up and wait until near completion for your deficiency walk through and possession of your brand new property!
Do I Pay Commission When I Buy A Presale In Vancouver, BC?
No. You do not pay any commission when you purchase a presale townhouse, condo or house in Vancouver, BC Canada.
Are There Taxes For Buying Presales?
Yes, GST. You will be required to pay 5% (GST) on top of the listing purchase price.
How Do Mortgages Apply To Presale Properties?
When purchasing a presale property, you usually are required to pay a 20% presale deposit to the developer to secure the presale. As soon as the property is completed you have a mortgage for the remaining 80% payable and the 20% you paid the developer is included and forms part of the purchase price. Unless you pay cash in full. Then you will not have any payments and you are a super lucky person and must have invested in properties with us before 😉