June 3, 2015 Leave a comment
Buying a pre-construction house or condo can be great, especially if you like working with a blank slate. But there are some things to keep in mind:
Expect to wait. Most projects take much longer than expected. You might have to wait two or three years between the date you sign your purchase agreement and the date you move in. If there are delays, you could wait even longer.
Know your rights. Builders can extend the occupancy date and all they need to give you is some notice. If they don’t give you notice, you may be eligible for compensation. I always recommend people read up on their rights on a site like Tarion.com.
Prepare for other costs: You may have to pay HST on closing and then apply for a rebate. There is a cap at $450K for either provincial or federal portion. If you are buying an assignment sale (just the ‘paper’ from an investor, you may get hit down the road for HST because of the original buyer’s tax situation…very confusing!!) You must consult the experts, assignment deals and pre-construction deals can be tricky, lots of costs to consider like education levies. Sometimes you can cap them, and your lawyer will be able to advise you.
Work with a good lawyer: Every buyer should work with an experienced lawyer. They will help you understand the purchase agreement, which can difficult to understand. Also, as a buyer, you have a 10-day period where you can change your mind or have your lawyer negotiate changes to the offer.
Understand the floor plan: Many floorplans are done to interior walls, not exterior walls, so you may lose space after drywall is installed. Contracts are very well-written. Many include clauses that say the builder can make changes up to a certain point. So, if you’re buying a unit in a condo, it may look a little different after you move in.