WHY HIRE A REALTOR® FOR A PRESALE?
Often buyers find it is hard to visualize what suite will work best for their needs. Having a real estate agent guide you through the process of selecting the right suite is an important part of being satisfied with your purchase.
Developer contracts have many conditions which benefit the developer. All agents that work at any presentation centre work on the developer's behalf, not your behalf. By hiring me, I can go through all of the details with you and make sure that you are protected and know what you are signing - as an outside agent, I will be working in your interests!
Also, one important aspect of presales is the developer's Disclosure Statement. As a buyer, you have 7-days to review this Disclosure Statement once signing the deal and can void the contract for any reason within this period. It is important to get a real estate agent to look over the Disclosure Statement, so you know what you have signed.
HOW MUCH DOES IT COST A BUYER TO HIRE AN AGENT FOR A PRESALE?
The developer pays the agent, the price you receive is unaffected and potentially lower than what you would otherwise pay. Also, part of all real estate contracts in BC states the amount of commission paid by the seller. No commission gets paid if the transaction does not complete.
IS A DOWNPAYMENT REQUIRED?
Typically you have an obligation to put between 5-10% down for a given presale, with a subsequent 1 or 2 payments of additional 5% sums (usually within 90 days of signing the developer contracts). Every presale contract tends to be a little different. This initial downpayment is part of the purchase price.
WHY BUY A PRESALE CONDO?
There are many benefits of the purchase of a presale condo. There is the obvious benefit of having something new and shiny, but aside from this benefit, there are a handful of other benefits as well!
IDEAL FOR INVESTORS:
Presales are known to be ideal for investors. There are several reasons for this, primarily the amount you put down to the potential return is often quite high. Just like all other real estate, presales face the same ups and downs of the housing market as any other real estate investment. Though, there is one significant difference between a presale and an already built condo.
A presale has no maintenance fees or mortgage payments during construction. And you do not need to worry about your renters or pay a vacancy tax.
You are putting down the (usually 20% downpayment) and profiting from any rise in the housing market. The market nearly always goes up over the long-term. For instance, on a $500,000 presale, you would need to put down roughly $100,000 - assuming the market goes up in the 3-5 years during construction - you are buying a condo in the future, for the prices today. Your investment does not have the worry of continuing maintenance fees or mortgage payments.
Another benefit is the ability to customize your condo. There are usually choices of colour schemes, and typically there are also options for upgraded appliances. Nearly all presales also have a wide selection of layouts to fit your needs perfectly.
WARRANTY AND NO/FEW REPAIRS:
New buildings come with warranties from the developer. These are typically 2-5-10 year warranties depending on what is in the building. Unlike many old buildings that often have a variety of costs for repairs.
GREAT FOR FUTURE RENTALS:
If you plan to rent the suite in the future, know your renters are happy to pay a premium on the new shiny condo you plan to rent out! Suites are typically easier to rent out, and it's usually less hassle to find reliable renters.
IS FINANCING REQUIRED?
No, financing is not mandatory, though in most cases, it is smart to put a subject to financing clause into your purchase contract. Typically a buyer will get a mortgage for the remaining portion of the price (80-85% of the purchase price), interest will only start on the mortgage when the lump sum completion payment gets paid.
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