The Most Common Mistakes of Pre-Construction Condo Buyers
Buying a pre-construction condo in downtown Toronto in 2023 can be an exciting opportunity. Investing in a pre-construction condo in Toronto gives you access to the best units at the lowest pricing, not to mention a brand new home that you get to customize to your liking! Pair that with an excellent neighbourhood and a reputable builder, and you’ve got yourself a slam-dunk. Purchasing a pre-construction condo is not only a great life choice, but also a lucrative investment if you choose to rent or sell later.
While the rewards are plenty, it’s essential to proceed with caution when investing in a pre-construction condo in Toronto. The process can be long and confusing, and if you don’t take care you can end up paying for it with your wallet or your sanity (or both!). We’ve put together a list of the most common mistakes of pre-construction condo buyers so that you can be empowered when making your purchase and enjoy the experience from start to finish.
Mistake #1: Not Getting Professional Advice
One of the biggest mistakes pre-construction condo buyers make is trying to cut costs and navigate the buying process alone. The process of buying a pre-construction condo in Toronto is complex. Before signing any legally-binding contracts, you’ll want to consult an experienced real estate agent, lawyer, and mortgage broker. There are many details to iron out before making major life decisions. These professionals can help you navigate your rights and responsibilities as a condo owner by helping you understand the terms and conditions of your contract. Additionally, they can advise you on the legal aspects of your purchase agreement and your financing options. They’ll also be able to spot any red flags or concerns on your behalf, and ensure that everything goes smoothly and that there are no surprises.
Mistake #2: Not Having a Pre-Approved Mortgage
One of the biggest blunders of purchasing a pre-construction condo in Toronto is when buyers make the assumption that they’ll qualify for a mortgage. Most pre-construction condo projects take years to complete, and your life circumstances can drastically change in that time. You may be eligible for a mortgage now but that might not be the case down the road. Before closing your deal, get in touch with a mortgage broker and make sure you qualify for a pre-approved mortgage.
Mistake #3: Not Planning for Closing Costs and Other Fees
Buying a pre-construction condo requires a considerable amount of financial planning. Many condo buyers look at the price tag without realizing that they’ll also be required to pay additional fees – for example land transfer taxes, registration fees, and legal fees. If you’re not prepared, these costs can quickly add up and become overwhelming. So, before making any decisions, you’ll want to ensure you’re aware of all the costs related to your pre-construction condo. Consider hiring a real estate broker who can help you understand your deposit structure, maintenance fees, property taxes, and closing costs. You’ll also need to factor in additional costs like the monthly interest rate on your mortgage (which can change over time), insurance fees, utility bills, and parking fees.
Mistake #4: Not Planning for the Future
Buying a pre-construction condo means buying a home that hasn’t been built yet. On average, it takes three to five years for a pre-construction project to be completed, depending on its size and complexity. It’s common for builders to face setbacks and delays in construction, which means that the time to complete the project and occupancy is unpredictable. Many buyers purchase their homes with their current lifestyle in mind, but when it comes to pre-construction condos, you need to consider where you’ll be in a few years. You’ll want to factor in potential life changes that may occur – for example, what if you end up having a child and a one-bedroom condo isn’t enough space? Before signing any contracts, think about your future and plan ahead.
Mistake #5: Expecting the Floor Plans to Stay the Exact Same
Many people fall in love with floor plans and renderings shown in marketing brochures without realizing that things can change. This can lead to disappointment when the finished condo isn’t exactly what they had imagined. It’s important to understand that when purchasing a pre-construction condo, you’re buying into the builder’s vision before construction begins. During the construction phase, it’s not uncommon for the initial floor plans to change slightly, either to create more space or to accommodate different features. The best way to combat disappointment is to ensure you’re working with a good builder who’s known to deliver quality results, and be ready to work with a flexible floor plan.
Do you have any questions about the pre-construction condo buying process? Connect with BAZIS on social media (Facebook, Twitter or Instagram) and let us know!
BAZIS is a real estate development company specializing in developing communities and pre construction condos in Toronto area. We’re 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.
5 Important Steps for First-Time Home Buyers in the Greater Toronto Area
As a first-time home buyer, the process of finding, financing, and purchasing your first new home or condo can be quite daunting. It requires taking a big leap of faith, and the experience can be accompanied by stress and worry.
If you’re a first-time home buyer in the Greater Toronto Area, we’ve written up a helpful outline of some of the key steps that you should take into account on your home buying journey. By following these easy steps, you’ll find that the process is relatively straightforward. With the right knowledge and tools in your toolkit, along with the right team, you can let go of the stress and embrace this exciting opportunity!
Step #1: Obtain a Mortgage Pre-Approval
A lot of people avoid the step, but acquiring a mortgage pre-approval can save you quite a bit of time. Best of all, getting a pre-approval from the bank is simple. Just set up an appointment with your preferred bank, and they’ll be able to guide you through the process. This can also be done virtually.
The bank will generally be looking at the following:
- Your income
- Any debts you have, such as credit card balances or loan payments
- Your credit history and credit score
- How much you have saved up for your down payment
Once you’ve completed the pre-approval process, shopping for your perfect new home or condo will be a lot easier and quicker. Having a pre-approval allows you to pinpoint exactly what your budget is and how much your monthly payments will be, putting you in a position where you can find the perfect home for you much more easily, comfortably, and realistically.
Step #2: Get the Right People Involved
The next step in the process of buying your first new home or condo is getting the right people involved. Wouldn’t it be lovely if you could just do it all yourself? Well, you could, but since buying your first home is one of the biggest purchases you’ll ever make and a major investment opportunity, it’s better to have a full team backing you before you make the final decision.
In any given scenario, these are the people that you’ll need to be in contact with when purchasing your first home or condo in Toronto:
- A real estate lawyer – for all the legal implications of purchasing your home, and to help you review all legal documentation
- A lender – for an outline of your financing options on your home
- A real estate agent – to scour the market for your dream home and to help you with making an offer, negotiating, and getting the best price
Step #3: Go House Shopping!
This is probably the most exciting part about buying your first new home or condo – the search! Now that you have a mortgage pre-approval and a team behind you, you’re ready to get into the market. Screening listings online and going in person to check them out is an exciting step in the home buying process. Make sure you’ve refined your criteria and that you know exactly what you want – like number of bedrooms, your ideal neighbourhood, and so on. Once you’ve done this, pinpointing which home on the market suits you will be a breeze.
Step #4: Submit Your Offer
So, you’ve found your dream home or condo in Toronto and now it’s time to take the big step of making an offer. Ideally when you submit an offer it should be in writing, which automatically becomes a legally binding document. It will cover things such as the price you’re prepared to pay, how much down payment you’re willing to put down, the closing date, and any other things you and the seller have agreed upon.
Step #5: Closing and Moving In
There’s only one thing that’s more exciting than shopping for your new home – moving in! Your closing date is the date that you can move in to your new home or condo. The process of closing the sale and having you become the owner is straightforward, and most of it will be handled by your real estate lawyer.
Moving in means that it’s time to start painting, decorating, and making your new home or condo truly yours. What could be more exciting than that?
Are you a first-time home or condo buyer in the GTA? Questions? If you need support, join us on our social media pages (Facebook, Twitter and Instagram) and reach out!
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