Process of Buying a Pre-Build?
#1
Posted 04 February 2012 - 09:08 PM
Can you please explain the process of buying a unit in a pre-build condo like the Promontory and/or the upcoming Era projects?
How and when do deposits, securing a mortgage, and first time home buyer program qualification fit into the picture?
Also, what are the benefits of using a Realtor in buying a pre-build?
Thanks
#2
Posted 04 February 2012 - 09:18 PM
I have always wanted to know the answers to your questions.
I'm sure Marko will chime in.
#3
Posted 04 February 2012 - 10:29 PM
#4
Posted 05 February 2012 - 10:50 AM
Hi Marko
Can you please explain the process of buying a unit in a pre-build condo like the Promontory and/or the upcoming Era projects?
How and when do deposits, securing a mortgage, and first time home buyer program qualification fit into the picture?
Also, what are the benefits of using a Realtor in buying a pre-build?
Thanks
Deposits/Securing a Mortgage
Promontory: Scenario #1 - 20% down (5% on signing, 5% after 60 days, 5% after 6 months, 5% after 12 months). No buyer qualification necessary. It is up to the buyer to ensure that they can complete when the building is finished.
Scenario #2 - 10% down with a CMHC letter (proof of qualification). (5% on signing, 5% after 60 days).
Era: I don't have specifics...other than...."Concert’s 5, 5 & 5 Deposit Program allows them to make an initial deposit of just 5% and a further two 5% payments over the next two years. If they’re a first-time home buyer, they’ll only need a 5% deposit."
I imagine for the first-time home buyer they will require a CMHC letter.
Mondrian: 10% down last time I heard - no CMHC letter required.
It is up to the buyer to ensure that they will be able to complete when the time comes. Most developments offer a rate hold via a large bank (BMO, TD, etc.) partner until the building is finishing; however, from my experience you can typically get much better rates on completion. A rate hold is basically free insurance should interest rates skyrocket.
First Time Home Buyer
You don't pay property transfer tax on completion assuming you meet the rest of the criteria (you plan on living in the unit, etc). Not exactly sure what they are doing at the Era in reference to "If they’re a first-time home buyer, they’ll only need a 5% deposit."
What are the benefits of using a Realtor in buying a pre-build?
Very good question. If you hire a knowledgeable REALTOR® they will be able to help you with the disclosure statement/contract and point out very important clauses. The disclosure statement & contract are written by the developer's lawyers and almost always to their benefit. For example, how late can a developer be with the building before you can back out of the contract?
A knowledgeable REALTOR® can also help give advice on which suite to buy. Orientation of unit? How close is it to the elevator (i.e. ideally, you don't want your front door facing the elevator doors)? Finishing, etc. With many pre-sales a REALTOR® can also help you compare the buildings. How do Miele appliances stack up to Frigidaire? Etc.
Finally, I give a large percentage of my commission back to the buyer which means typically I get obtain the best net price for my buyers.
On attractive pre-sales if you walk into the showroom and the price is $299,900 and the units are moving quickly the sales office will not give you a discount. You will be forced to pay $299,900. With my services you will still pay $299,900 as per contract but I will kick back $2,500 of my commission to you when the developer pays me. I write a separate contract between myself and the buyer outlining the service discount also known as a cash back program.
Marko Juras, REALTOR® & Associate Broker | Gold MLS® 2011-2023 | Fair Realty
www.MarkoJuras.com Looking at Condo Pre-Sales in Victoria? Save Thousands!
#5
Posted 05 February 2012 - 11:48 AM
I friend of mine purchased a pre-build in Vancouver a few years ago when the market was red hot. He then sold it before it was completed at a substantial profit.
That probably won't happen around here anytime soon, but I thought that you might have a comment or two on that scenario. I would assume that there might be a pitfall or two that one would have to watch out for.
#6
Posted 05 February 2012 - 05:29 PM
Thanks Marko.
I friend of mine purchased a pre-build in Vancouver a few years ago when the market was red hot. He then sold it before it was completed at a substantial profit.
That probably won't happen around here anytime soon, but I thought that you might have a comment or two on that scenario. I would assume that there might be a pitfall or two that one would have to watch out for.
Not all developers allow you to assign; however, the Promontory does at a cost of 1% of purchase price or $1,000 (plus HST) if the assignee is the Purchaser's spouse, parent, child, grandparent or grandchild.
The market right now is slow and flat and I don't think people will be able to make substaintial profits via asssignment before completion.
Marko Juras, REALTOR® & Associate Broker | Gold MLS® 2011-2023 | Fair Realty
www.MarkoJuras.com Looking at Condo Pre-Sales in Victoria? Save Thousands!
#7
Posted 05 February 2012 - 09:57 PM
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