Purchasing a new home via the builder or a realtor can be a great experience.
Approximately one third of all homes sold in Canada each year are new constructions.
Exploring the presale development market is always worthwhile especially when comparing to existing homes in established neighbourhoods.
Remember that it is important to keep in mind certain aspects of the home for sale before diving into the deep.
1. Compare multiple presale properties
Explore the neighbourhood of which the presale home will be built.
REW.ca (Real Estate Weekly) has some tools for finding your new home in the Metro Vancouver region. Prospective homeowners can find both MLS listed homes for sale and presale developments.
Exercise due diligence when considering any particular developer or builder
Spend a lot more time to review the developer’s Disclosure Statement.
Double Check the presale contract yourself them I highly recommend getting the
contract proof read by a lawyer.
Pre-delivery home inspection shortly before the buyer takes possession of the home
Be proactive and get the home warranty in writing
2. Hedge the known risks
When buying a presale home in the greater Vancouver area and fraser valley the price you see provided by the developer, or marketing firm is the price before GST and Property Transfer Tax. Use a PTT and GST calculator for finding out the net cost of a potential purchase
If the real estate prices in Vancouver were to decline and the value of the presale home at the time it completes is below what was originally paid, the Buyer is still obligated to complete. In other words, the buyer may not rescind from the completion without involvement of the real estate legal system
Buyers may not get exactly what they paid for. During construction of the home, changes can occur. Very often developers protect themselves in the fine print – Ensure you have ample time to review the contract and disclosure statement
Reasonable chance of the pre-sold building to not complete on time and the completion can be delayed
Never guaranteed of a profit once the presale has been completed
If a presale home needs to be sold before completion or at the time of completion, it is especially hard to compete with other sellers when the market is low
Not every bank will fund presale homes. Some lenders will only cover the value at completion. The downside is the amount could be less depending on the market conditions
Buyers could be moving into a construction zone if there are several phases to the development site
3. Acknowledge the foreseen advantages
Small deposit for the interim and save cash while the development is in the works
Have the ability to customize elements, and layout of the future home
Newly built homes are covered under the Home Warranty Insurance program in BC
Home buyers are protected under the Real Estate Development Marketing Act (REDMA) and should know their rights
The value of your home can be higher upon completion in a rising market
After a down payment has been made, the developer is required to provide at least 1 year warranty to cover issues before building is complete
Get the latest trends and technologies integrated into the newly built homes.
Feel free to contact Ronald Klarenbeek any time
By perry cheung.
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