Buying Pre-Sale Homes: What You Need to Know!
When you enter into a contract to buy a new home before the construction has begun or during the construction period, this type of transaction is referred to as a ‘pre-sale’. You will enter into a purchase agreement with the developer to complete the transaction at a future date, when the home is completed and ready for occupancy.
Before deciding to buy a new home in a pre-sale transaction, review these key considerations:
- Purchasing a pre-sale property means you will be buying before you see the final product, from a floor plan and artist’s visual renditions.
- Research the builder / developer’s history and reputation. Seek the expert advice of your Realtor®, Lawyer & Mortgage Broker.
- Be prepared for the completion and possession dates to be delayed by a year or longer.
- If you are financing your purchase, your mortgage pre-approval will most likely expire before completion, meaning there is no guarantee of a mortgage or a certain rate.
- You will agree to the price at the time of initial purchase. Future market fluctuations may or may not sway in your favour.
- The developer is required to provide you with a Disclosure Statement. Review this along with the purchase agreement with your lawyer prior to making an offer.
- Once you have an accepted offer, you are entitled to a 7-day rescission period, allowing you to exit the contract within those 7 days. It is highly recommended that you review the contract with your lawyer during this period.
- As with all new construction, GST will be applicable on the purchase price.
- Your new home will be covered under a 2-5-10 New Home Warranty.
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Information intended as general information and is not to be relied upon as guaranteed.