How to Pre-Con
Buying a Pre-construction Condo
BUYING A PRE-CONSTRUCTION CONDO
Pre-construction condo have become a popular real estate investment option. NÜ condominium projects usually take 2 - 4 years to be completely built. It is important to remember that there are different phases to the project, and the NÜ Homes team is here to guide you through every step.
Steps to buying a
HIRE AN EXPERIENCED BROKER
A Pre-construction Real Estate Broker focuses on
Pre-construction homes. These brokers have a large knowledge of the latest upcoming projects and exclusive access to advance information about unit availability months before the project goes on sale. The NÜ Homes team is here to help!
LOCATION AND DEVELOPER
Giving your Real Estate Broker the right information about location, features and amenities will help them find the project that is right for you. Future city plans and appreciation growth statistics are just some of the many factors that may influence your decision. Doing a background check on the developer is also essential. They are not all built the same!
SUBMIT A WORKSHEET
A worksheet is similar to a reservation form. When you submit a worksheet you are telling the builder which units are of interest to you. Worksheets are looked at on a first-come-first-served basis. Working with platinum brokers will give you the benefit of the first choice as they have exclusive access to the first units released.
If the units that you requested are not available, the builder may offer you similar units within your criteria. When you submit a worksheet you will need to provide personal information such as Government ID, home address, SIN number, contact information, and place of employment.
SIGN THE AGREEMENT
After the builder allocates (offers) you a unit, an appointment is booked for you to sign the purchase of sales agreement. The purchase of sales agreement contains the purchase price, deposit structure, and amounts along with legal and financial obligations. This agreement also outlines your rights as the purchaser and the builder’s rights as the developer. This is a large document you will not have time to read everything.
During the signing, you will be asked to pay your first deposit (usually $5,000) for the condo unit in form of a cheque. They will also ask you for post-dated deposit cheques that will cover your financial obligation until closing.
After signing your agreement, you have 10 days (by law) to review your agreement and make sure that all the Terms and Conditions are satisfactory to you. New homes highly recommend that you hire a real estate lawyer with pre-construction experience to review your agreement. Within this 10-day cooling period, you have the right to cancel your agreement at no cost and without penalties.
After the cooling period has passed and you decide to keep your unit, there are a few steps that need to be completed before the closing date. The first is to pay your initial down payment. The first down payment is usually 5% of the total condo price and is required within the first 30 days. You will also need pre-approval for a mortgage. Banks will only guarantee the mortgage principal amount, so you will have to wait until about 3 months before the closing date before you can lock in a mortgage rate.
The decor center will contact you and ask you to come in so that you can choose the finishing materials colors and offer you upgrade options.
You will get a call from your lawyer asking you to come in to review closing documents and outstanding deposits/payments owed to the developer. This is where you will also be notified of your occupancy fee. The occupancy fee is a payment made to the builder for being able to live in your unit before the title is transferred to you. Some projects will allow you to rent your unit during this period.
This is when the builder is ready to register and transfer the ownership title over to you. You will meet with your lawyer to sign all the required documents and pay any outstanding costs pertaining to your purchase. Your mortgage payments will begin on the final closing date.