Pre-construction Condos or Resale? What’s Right for You?

In the GTA, pre-construction condos are frequently the subject of considerable interest. While many potential homebuyers are interested in purchasing these units, others are dubious of the advantages. How big of an advantage does it have, or can you obtain just as much value from an older property? It is best for condo hunters to educate themselves with the advantages and disadvantages of each choice. So, let’s get started!
 
Down Payment
When it comes to the pre-construction vs. resale argument, down payments can play a significant role. In the case of new condominiums, buyers can spread out their deposit payments over a longer period of time (typically 1 to 1.5 years). Buyers will have more time to save for their down payment and closing fees with this more flexible option, opposed to the resale option.
 
To learn how first-time homebuyers can come up with the money needed for a down payment, click here!
 
Pricing
In both new and older buildings, it is possible to find a fantastic deal. Pre-construction condominiums have a few distinct advantages in terms of cost. You may save money by getting in on the ground floor if you deal with an agent that is well-connected enough to provide VIP and platinum pricing and pre-construction units are often sold with additional financial incentives by the developers.
 
Also, buying a pre-construction condo gives you the opportunity to "lock in" a low purchase price. Between the time you sign your contract and the time you close, your agreed-upon price will not climb over that amount. Your condo's worth will continue to rise over this time period.
 
Customization Options
If you want to live in your condo instead of renting it out as an investment, the flexibility to personalize it may be an important consideration. Your new home's flooring, countertops, and everything in between may be completely customized during the pre-construction phase. A resale condo, on the other hand, may not allow you to make the changes you desire.
 
Move-in Date
Only condominiums that have recently been resold should be considered if you want to move into a new home quickly. Although it may take some time to get the home of your dreams, pre-construction may be ideal for those who are willing to wait. There is no set timetable. It might take years to complete a pre-con project, since delays are possible. If you're weighing the pros and cons of pre-construction vs. resale, consider your long-term goals and needs.
 
Closing Costs
No matter what kind of property you're purchasing, closing expenses can quickly add up. Condos that are under development have their own set of fees. Here are some of the costs you'll incur if you decide to take the pre-con route:

• Developer Fees - Taxes levied by local governments are passed on to the condo developers, who          subsequently charge development fees to buyers. Your contract should set a limit on these costs,            which can vary widely from building to building.

• Occupancy Fees - There are additional costs for pre-construction buyers, such as the occupancy      fees. Interim occupancy fees are levied for the time between the day you take possession of your unit    and the date on which you become its legal owner.

• HST - In the event that neither you nor a member of your immediate family plans to move into your pre-con unit, you will be subject to a 13% HST tax.

 
 
Avoid these 5 costly mistakes that most first-time homebuyers make.
 
 
There is no right or wrong answer when it comes to pre-construction or resale condos. If you rather design your condo from the ground up while waiting possibly a couple years to move in, then a pre-con might be the right choice for you! However, maybe you're stuck with the decision and need more info? An experienced real estate agent, with the knowledge of the GTA’s condo market, such as Lorraine Mondello can assist you in making an informed decision.
 
To get in touch with Lorraine today, click here!