Buying a pre-construction condo in downtown Toronto is a big decision and financial investment, and you should be informed and confident with the details of your potential new home. In order to get the best possible deal and also a safe investment from a reputable builder and developer, there are several questions you’ll want to consider along the way. The following questions are designed to help guide you through the process of buying a new condo in Toronto and avoid common mistakes that new buyers make.
- Who is the builder/developer and what is their experience? Who is the contractor?
Before purchasing a pre-construction condo, you will want to do some background research on who you’re purchasing from. Who are the condo developer and contractor? Do a quick Google search and see if you can find any potential red flags. If the developer and contractor sound good, check if they have experience building the type of condo and amenities that you’re looking for and that suit your lifestyle. Are they located in the city of your choice and do they have an extensive portfolio?
- What can I afford?
In order to determine what unit you can afford, visit the developer’s website or the sales centre of the pre-construction condo you’re interested in. Many developers have affordability calculators on their websites that can help you figure out your budget and down payment, and if not, a sales centre staff member should be able to help you determine which unit is within your budget and what you can afford. You should also be aware of all the costs that come along with a pre-construction condo, including occupancy fees and closing costs.
- What is the deposit structure?
Before investing in a pre-construction condo, make sure you know what the deposit structure is. A deposit structure is a payment schedule to pay off your down payment. Sometimes you can negotiate your deposit structure with the builder so that you can make your payments comfortably.
- Will my deposit be protected?
The deposit for pre-construction condos in Toronto is typically 20% of the purchase price, although this varies. Even though your deposit is fully protected by the Condominium Act, you should always ask the developer what other security measures they have in place to protect your deposit. When purchasing a pre-construction condo from a respectable builder, your purchase fees should include a Tarion Warranty Corporation enrollment fee that protects your deposit in the case that the project is not completed.
- When can I take possession?
Sometimes pre-construction condo projects can be delayed for months, and sometimes even years due to a variety of reasons. Most builders try to honour their commitments but sometimes things happen out of their control. First you will want to ensure that the builder has a good reputation for finishing projects on time, and second you will want to ask if they have a firm date of possession. Protect your investment by asking the condo developer what they will do if your possession date is delayed for any reason. You can also check the developer’s history in Tarion’s Builder Directory before committing to your purchase.
- What is the outside date?
An outside date is the date a developer will give you if your pre-construction condo is not completed on time. Consider it as an extension date. Make sure you’re comfortable with this date, and ask the developer if they don’t complete the project on time, what are your options for backing out of your contract.
- How many units remain in the building?
This number can tell you a few things – it can tell you how many people are interested in this building, and when construction will begin. If there are a high number of units remaining, it might be a while before the developer has enough capital to begin the construction phase. Then again, if you’re getting in early, you may be getting a better deal.
- How will I know if my condo will meet my expectations?
This again comes back to the reputation of the builder/developer. You need to do your due diligence and make sure the developer has experience and that they have a good track record of delivering on what they promise. Check out their previous condos and see if you like their style. If you purchase from a well-known builder, you shouldn’t have to worry that your condo will end up disappointing you. Another thing to consider is that you really need to know what you’re purchasing. Familiarize yourself with the project’s sales centre, ask questions, and study the floor plans and finishes, as well as the amenities spaces and renderings. Also, make sure that you’re happy with the neighbourhood in which the condo will be built.
- What if I have questions or concerns?
Purchasing a pre-construction condo can be overwhelming but is also very rewarding when you finally move into your unit. Ask the developer about their customer care, and what services they have in place to help you with any questions that may arise. Some developers have extensive customer care practices and will keep you updated on construction updates, occupancy dates and fees, etc.
- Who will manage the building?
The builder is responsible for developing the building, selling units and the construction phase of the building, but usually another company is hired to manage the building once construction is complete. Find out who will manage the building and check into their reputation.
- What other developments are coming to the area?
Ask the developer if they know of any other builders working in the area, and do a search online. Sometimes another condo development could end up blocking your view or the construction of another tower might make your investment less desirable. Find out what is happening in the neighbourhood.
Do you have any questions about how to avoid poor pre-construction investments? Connect with BAZIS on social media (Facebook, Twitter or Instagram) and let us know!
BAZIS is a Toronto Real Estate Development Company specialized in new construction condos for sale and pre-construction condos in Downtown Toronto. We are committed to excellence in every facet of the commercial and residential real estate development process. Combining visionary architecture, design, marketing and construction with the epitome of corporate integrity and environmental responsibility, BAZIS has become a major force in articulating Toronto’s ever-evolving skyline.