Unlike what many people believe, buying a pre-construction condo is a great investment. However, there are many myths and facts about buying a pre-construction condo in Toronto.
For example, you are buying a Toronto condo based on a conceptual understanding of what you will have in the future. Also, you should pay for maintenance fees, upkeep, and common amenities. Therefore, it’s crucial to know facts about buying a pre-construction condo before buying it.
There are many incorrect myths and facts about buying a pre-construction condo in Toronto that you should be aware of.
1- They are not Affordable
The point is that buying a condo is more affordable than a freehold home, especially when it comes to the centre of Toronto. The important question is whether you can afford a condo or not?
To make sure about affordability, check the online Toronto real estate market because you can get enough information you need. The crucial point is that you should be aware of your financial stats, such as your salary and the amount of money available for a down payment, to get an exact idea of what you can afford.
2- You Need so much Time for the Condo to be Ready
There is a common belief that if you buy a pre-construction condo, you will get old, and your condo will not be completed. It’s another one of the myths and facts about buying a pre-construction condo in Toronto.
It can be true sometimes, but it is not a common problem, especially if you do research to buy from a reputable developer so that you will not have any problem.
Delays are sometimes inevitable and are beyond the developer’s control. However, top-rated developers see this process as a mission to finish this process on time.
3- You have to pay a 20% deposit all at once at the beginning
A typical deposit for a pre-construction condo in Canada is 20% of the buying price for Canadians. However, international buyers usually pay 35%. As a result, if your suite costs $500,000, 20% is a significant number.
High-quality and reputable developers don’t need to get this 20% all at once. Instead, you need to pay the deposit in a period of time, sometimes even in 15 months.
Your deposit is protected by the Condominium Act. However, ask your Toronto real estate agent what other rules and approvals are considered to prevent fraud and ensure the full security of your deposit.
4- You might Lose Your Deposit if the Developer Experiences Bankruptcy
Bankruptcy used to occur in the past for developers, but the risk is low now. As a result, Ontario authorities have regulated the Tarion Warranty Corporation. This corporaton provides safeguard to all new Toronto home buyers.
Therefore, when you are buying a new home, the final cost includes a Tarion Warranty Corporation enrollment fee, providing deposit protection up to a maximum of $20,000 plus a limited amount of interest that has accrued.
5- You don’t Really Know What is Waiting for You
Suppose you buy a pre-construction condo from a reputable developer. In that case, you don’t need to worry about the final home because it will definitely meet your expectations.
However, before buying these homes, you need to look at the floorplans, finishes, and amenity renderings. In this case don’t hesitate to ask questions.
In the sales office, you can also see other projects of the developer and find out which one is the best for you.
6- There will be a Surprise Bill in Closing Time
When you are buying a condo, you should be aware that the final costs are not just the deposit and mortgage payments. Other fees such as maintenance fees, property taxes, utilities, etc., are also something you should consider.
Also, there are closing costs as well for pre-construction condos, such as land transfer taxes, meters, legal fees, warranty fees, development levies, and administration fees.
Besides, development levies were the point of argument recently. Developers should pay a certain amount of money to municipalities to help fund city infrastructure.
If you are buying a pre-construction home, you need to ask the developers how they manage these fees. A reputable developer will not hide these fees and put these extra fees into the price of the suite.
7- Developers don’t care about their buyers
It can be true about some developers, but Canadian reputable developers will never be included in this category.
You need to make sure that if you have any problem during the process, there is a caring team available for you.
Also, it’s crucial to know which company will be the manager after you move in.
There are many myths and facts about buying a pre-construction condo in Toronto, and most of them are sometimes true.
The difference takes place when you choose a reputable developer to buy a pre-construction Toronto condo. If you do this, it’s more likely not to face any problem.
In this article, seven common myths and facts about buying a pre-construction condo in Toronto were discussed. However, the best recommendation for you is to consult a Toronto real estate agent to help you through this process.
Also, taking a look at the Toronto online real estate market will help you to have a better understanding of available Toronto homes, whether they are constructed or they are in the pre-construction home.