Noanne Chen
Greater Toronto Area Real Estate
647-608-6825
noannechen.realtor@hotmail.com
Purchase a
pre-construction Project
Are you ready to embark on a journey where your new home unfolds from the ground up? Welcome to the world of buying a pre-construction home, where dreams take shape, and possibilities are as vast as your imagination.
1.
Understand the concepts of pre-construction Projects
Such as move-in date, where to live, budget range, need for parking space and/or a locker, etc.
Benefits
High leverage
No more than 20% down payments, with long payment structures.
Fit your needs
choose a floor plan and your specific finishing.
Passive investment
No tenants, no mortgage pressure.
Disadvantages
Not liquidable
can not move immediately, rent it out, or sell right away.
Delays
taking the risk of your new condo not being built on time due to delays.
Cancellation Risk
Risk Associated with Pre-construction Purchases
Market Value
Interest Rates
Financing
Completion date
Finished product
2.
Identify client’s needs
- Move in right away?
- Affordability (including getting mortgage)
- Tax issues consideration.
3.
Getting pre-con project and signing agreement
Once you’ve decided on a suite type, size and price range, we’ll get you to submit a worksheet. The sooner you do this, the better.
After submitting your worksheet, you will receive an allocation. If you got what you want, then at the sales centre to start the sales process and sign the Agreement of Purchase and Sale (APS).
When the signing event arrives, please come prepared on the day of signing with your Government-issued photo identification and your cheque book. You will not be able to buy a suite without these items.
4.
The 10 Day Cooling Off Period
After the contract has been signed with the developer comes a period commonly referred to as the "10 Days Cooling Off Period." By Law, you legally have this period to review your purchase agreement. You are 100% protected during this period and the unit is on hold under your name for those 10 calendar days.
We strongly recommend you take this time to find a lawyer with experience in pre-construction purchases to help you review the contract. You can also get your mortgage pre-approval or commitment letter in place with your financial institution. It’s not necessary at this stage, but it’s best to be prepared.
If you change your mind during the 10 calendar days or decide you are not satisfied with the contract, you have the right to cancel it at this time with no questions asked. There will be no financial penalties and your post-dated cheques returned to you. If you choose not to proceed, please bring your purchase agreement and other documents to the sales centre, where you will sign a rescission letter.
5.
Get Mortgage Pre-Approved Letter
Normally, you will prepare a mortgage pre-approved letter within 60 days after signing.
6.
Setting reminders for the upcoming deposits
Make sure you have sufficient funding in your account before the deposit due date to avoid any potential NSF charges.
7.
Design Your Suite
While the condo is under construction, the developer’s décor centre will be contacting you to pick your suite colours, finishes and offer any upgrades. This is the time to turn your condo unit into the home of your dreams.
8.
Occupancy or Assignment
Assignment
Only do assignment when builder says you can.
(Please note: most of assignments are not allowed to post on MLS)
Provide the assignment contract, Mortgage Pre-approval, IDs, to builder, and waiting for approve.
(Please note the assigner is responsible for all costs)
Admin fee & assignment fee.
Tax issues.
Interim Occupancy
Final deposit.
Interim closing fee
(estimate property tax, condominium fees (projected common expense contribution to keep the building running) , a monthly interest payment on the remainder of the total purchase price, rental insurance, etc.)
Getting mortgage pre-approval.
Lawyer ready.
TARION warranty process
Final Occupancy
Final statement of adjustments provided by the lawyer.
(sale price, HST Tax/Rebate, total deposits paid, occupancy fee adjustment for month of closing, property taxes, realty taxes, tarion enrollment fee, development charges/education levy, parkland contribution, art levy, law society levy, discharge fee, status certificate, and balance due on final closing.)
A Trust Ledger
(how the funds will move through your Lawyer’s Trust account on closing day)
Registration
(A day or two before closing, you’ll meet with your Lawyer again to sign your final documentation. Once you’ve completed the final closing process, you will receive the official title and your mortgage will be registered.)
Noanne Chen
647-608-6825
noannechen.realtor@hotmail.com
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