- Pre-sales are a common component of the Lower Mainland Real Estate Market. Pre-sales are simply defined as homes that are available for purchase before being built, or in the early stages of construction.
- In some cases, developers wait for construction to be completed before selling a move-in ready home - this is referred to as a "new construction".
- For many prospective buyers in the Lower Mainland, purchasing pre-sale is the most effective way to enter the property market due to the many advantages offered.
Pros of Presales:
- Building Up Equity | Depending on the state of the property market in the area, your property may appreciate over the time that it is built.
- Warranty Protection | Presale homes come with 2, 5, or 10-year warranties, which allow for minimal cost as a new owner upon moving in. The 2-5-10 insurance covers 2 years for labour, 5 years on the building envelope, and 10 years on the structure.
- Brand New Build | Being involved from the start may give you the opportunity to customize the layout, finishes, colour scheme, and more to make sure the property you move into is the one you want!
Drawbacks of Presales:
- Federal Tax | 5% GST is required on top of the purchase price displayed by the developer. This amount is payable upon completion.
- Purchasing a Floorplan | Purchasing pre-sale requires a bit of imagination and vision. Developers can make changes to the floor plan, materials, or other design elements to comply with building codes and they usually reserve the right to make these changes without notifying you.
- Delay in Construction | Most pre-sale developments end up taking longer than expected. These delays can range from a few months and up to 1-2 years.
Feel free to contact me with any questions if you're interested in purchasing pre-sale!