Buying a condo in Toronto can seem like a daunting task. The prices are high, the investment seems risky, and there’s no knowing how the real estate market may shift in the coming years. One excellent option is buying a pre-construction condo that gives you the flexibility to choose and design your space from the get-go. Most affordable (and already built) condos in the city require a lot of work. On top of the initial down payment and mortgage, there’s always work to be done to remodel older units or repair the damage from neglect.
But isn’t buying a pre-construction condo risky?
There’s a lot of concern surrounding properties that you can’t actually see until they’re finished. What about delays? What puts you at risk? We’ve put together some helpful information for you on how to pursue your perfect pre-construction condo with peace of mind that yours is a safe investment.
How big of a deposit do I need, and how do deposit structures work?
The way pre-construction condos are financed is one of the primary differences between these and a resale condo. Whether it’s a resale apartment or a pre-construction condo unit, it’s important to note that many people put up to a 30% down payment towards the purchase price of the unit. While this is significant, the down payment does not need to be paid all at once. Rather, the down payment is made in several deposits over time, usually spread out over 500 days, with a final portion paid at closing. usually within the course of 500 days, and with another portion of the deposit paid at closing. In some arrangements, there would be an agreed upon schedule to pay every 30 or 60 days until occupancy, where you’d pay that final lump sum.
These deposit structures can vary from builder to builder, so it’s important to make sure your contract works for you.
Another piece of useful information is that anyone who buys a new condo in Ontario has a 10-day cooling off period to consider their purchase.
In those 10 calendar days (not business days, it’s important to note!) you can arrange to get financing pre-approval and get everything looked over by a lawyer. In those 10 days, you can back out of the contract and get your deposit back in its entirety, without any deductions.
Do I need mortgage pre-approval for pre-construction condos?
Getting a mortgage pre-approved can be an invaluable asset when buying a pre-construction condo and, in some instances, is required by the builder. It’s ideal to look into mortgage pre-qualification and consequently pre-approval well before considering buying a pre-construction condo. This will help you make sure that all of your finances are in order and that this is truly a sound investment. Pre-qualification serves as an excellent starting point to determine what you’re able to afford, which can be helpful when planning around such a large investment. Take the Mortgage Stress Test to learn more about your finances!
When you’re considering buying a pre-construction condo, the most valuable asset in your arsenal are your resources, and Hello Condo is here to help. As a hub for all your pre-construction condo information throughout the GTA, we have resources available to not only help you decide if owning a pre-construction property is right for you, but to help educate you along the way, and make you feel confident in your decisions. Pre-construction properties aren’t without their extra quirks, but with Hello Condo you can find the home of your dreams without the stress.
Want to find your best investment solution?
Explore the HelloCondo website offerings to see what condo investment opportunities are available to you. Whether you’re a first time home buyer or someone looking to make a rental property (or several rental properties), think of HelloCondo as your solution to connect you with your ideal property.
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