The search is on for a place to live, and you are wondering what your next move will be. Maybe you are a first-time home buyer or have gone through this process a few times before. When most people start the process, they think about what’s already on the market: new builds and resales. What if I told you another option might be perfect for you? Let’s chat through 10 Reasons to Buy Pre-Construction and open your eyes to another possibility.
1. People love new things. That fresh car smell, those shiny new shoes, a new phone out of the box: there’s something to be said about being the first person to own something. A new house or condo is the same. You are the first to live there and decide on furniture, décor, and which room will be used for what. You only have to share it with those you live with, not the owners before you.
2. Set it and forget it. Pre-construction homes are a low-maintenance investment that you purchase and watch grow over the next 3-5 years. These homes are guaranteed to rise in value while being built, so you are essentially locking in at today’s prices with the promise of future money. Even if you were to contribute to a TFSA or RRSP over the next few years, chances are your rate of return won’t even come close to the rise you will see here.
3. Welcome to your designer home. This is the next best thing to getting a completely custom home without the custom home price tag. When purchasing directly from the builder, you are presented with a design studio where you can choose from options and finishings that fit your vision. In addition, although builders may not budge on the home’s overall price, you can negotiate on upgrades. If this were a resale, all these extras would have to be done as renovations if you wanted to make changes.
4. There are less maintenance costs. When purchasing a pre-construction condominium, maintenance fees are set super low. Even if they were to increase in the years after moving in, you save some money. In addition, all home appliances, fixtures and general construction are new, so it’s very unlikely that you would have to spend money on upgrades or repairs. After all, you’ve either chosen or seen everything that the builder is putting in the floor plan.
5. You receive a great warranty. Builders in Ontario have to provide security on new homes. On pre-construction builds, this includes deposit protection. You also receive one and two-year contracts for certain defects in work and materials and a seven-year contract for major structural defects. The amount you receive will depend on if it’s a freehold home or a condominium. Either way, if something unexpected happens in those first few years, you are covered.
6. You’ll get to live in a great neighbourhood. Builders purchase land plots in up-and-coming neighbourhoods to add value to that location and because they are banking on their investment appreciating. Because of this, you tend to see pre-construction builds in places with great amenities, like-minded communities and a city you may not have been able to afford if it was a resale, like downtown Toronto.
7. There’s a 10-Day Cooling Off Period. Not in love with your purchase or have a change of heart? You are entitled to a 10-Day Cooling Off Period (keep in mind these are calendar days and not business days), where you can cancel your purchase and return your full deposit from the builder. Everyone’s situation is different, and things can change in the blink of an eye, so it’s important to note that you have an out to draw upon if needed.
8. You have more choices available. When searching for a new place to live, you might look online or through a mobile app to see what is currently listed on the market. Did you find your dream home but wish the driveway didn’t have a sidewalk cutting through, like the other side of the street? Or would you rather face a main road with an open field versus looking upon someone else’s house? When you buy pre-construction, depending on how many options the builder has left, you can choose a corner lot, which direction your house faces, and what you back on to. The lot size between homes may also differ because of how the land is laid out.
9. It’s cheaper overall. On pre-construction builds, the builder factors the HST into the price. If you plan on living in the home as your primary residence, you can receive an HST rebate, a huge cost saving. When purchasing the house, you don’t need to simultaneously put a large lump sum downpayment. There is usually a flexible payment schedule, with only a 15-20% deposit. This also gives you more time to save money as the home is being built. In addition, you can lock in your mortgage rate ahead of time at today’s pricing.
10. There are no dreaded bidding wars. Because who doesn’t like a stressful, midnight, nerve-wracking fight over a couple of hundred dollars? This one is pretty self-explanatory. Since you can either afford or not afford the price the builder has set, you don’t have to worry about others getting in on the deal, potentially raising the cost higher than what you budgeted for.
These ten reasons outline why you should consider purchasing a pre-construction home. It’s cheaper overall, more choices are available to you, and you can customize what you buy, and your low-maintenance investment grows while you save money. Want to see what’s up-and-coming? Let’s chat and help you make your next move.