Frequently Asked Questions
We are a Full-Service Company Offering 24/7 Services to cater to your Real Estate Needs. Unlike other real estate companies, we work in a Team Environment. When you work with our team, not just one agent or an individual but the whole team starts working to make your experience as smooth as possible. Our extensive marketing campaigns throughout GTA give us a competitive edge over the others. We are a professional company, priding ourselves on our standards, integrity, and work ethics. Our motto is, clients first! At Team Realty Bulls, we strive to provide clients most effective and possible beneficial services. Attention to your needs is of the utmost concern and importance to us. As a result, we not only build great deals, but we also build great relationships.
Pre-construction is buying a home or a condo before it is constructed. Including:
• High-rise condos
• Low-rise condos
• Detached houses
• Semi-detached houses
The Benefits of Pre-construction Homes
There are quite a few benefits, including:
The warranty programs in Canada offer protection for new build homes, including delays in occupancy and closing coverage, security for your deposit, and the cost of repairs should there be issues in the construction of your home once you move in.
While your home is being built, it is almost guaranteed to rise in value.
No Bidding Wars
Bidding wars can increase prices depending on where you’re shopping for your home. When inventory is low, buyers are desperate, and the more attractive the home and neighbourhood, the more chance you could end up paying an inflated price for a resale home. However, you’re looking at a set price when it comes to pre-construction. So you’ll know exactly how much you’ll pay, usually at fair market value.
You have the option of designing your home with plenty of upgrades available. You’ve got upgrades for things such as kitchen counters and flooring but can also often make structural upgrades, including adjusting some floor plan options. Because you’re making all your decisions for changes during the building process, they are far more affordable than a reno or upgrade once you move in. As a result, you can make intelligent decisions that will increase the resale value of your home.
Lower Condo Fees
When buying pre-construction condos, the fees are lower in new builds than in resale condos. Everything is unique, and the management has yet to see how much it costs to operate the building or property.
Flexible Deposits and Down Payments
Although you tend to need more for a deposit or down payment for pre-construction, the price is staggered. Therefore, you have time to keep saving as a small amount is paid upfront, and then the rest is spent on a schedule leading up to the final closing.
You’ll have more choices when buying pre-construction than resale condos, such as the unit’s floor and the location (i.e., a corner unit or a better view).
10-Day Cooling Off Period
You’ll have ten days to “cool off” and reconsider purchasing. You can arrange for financing and have a lawyer review the agreement during this time. Should you change your mind or find something in the deal you don’t like, you can get your full deposit back and walk away.
The average pre-construction condo takes between 3 and 4 years to be built, so why invest in something so far down the line?
Buying a pre-construction condo has several upsides you may not have expected. First of all, early buyers tend to get the absolute best price. Often when a condo begins development and opens up to pre-construction sales, many of those units are snapped up quickly by investors, who then sell the condos once the building is complete. This is an excellent way to expand your property investments, but for a young family looking to buy, they’re not getting the best price.
Because condos are often sold so quickly, and before the building is even built, this can significantly limit location choice. Suppose you’re looking to buy a property within a specific region of the GTA, and you limit yourself to move-in-ready developments. In that case, you’re narrowing your scope and cutting out dozens of exciting opportunities in your favourite neighbourhoods.
Buying early also offers options for exactly which condo you want. Are you a morning person who loves to watch the sunrise? Maybe you prefer a view of Toronto’s breathtaking skyline, but you’re looking for midtown or North York condos? In that case, a condo in its pre-construction phase likely has several different south-facing choices for you to peruse. A unit on the development’s east side might suit you.
Finally, and this may be the best part – purchasing a condo during the pre-construction phase means customization! Developers offer different ways to customize a brand-new condo, from choosing your specific floor plan to upgrades like kitchen islands, different tiles in the kitchen or bathroom, fixtures and appliances, and many others! As a result, you can enjoy a more luxurious home that’s more energy-efficient or simply more YOU.
Now that you know what a pre-construction condo is, you may be interested in buying one.
If so, here are the exact steps you need to take….
Stage 1: Make a Down Payment
Pre-construction condos require a much larger down payment than resale condos: 20% for Canadian citizens and 35% for non-residents.
The good news?
You can spread the down payment over a long period, thus easing any financial obligations.
Here is an example of a typical deposit structure:
- First installment: 5% in 30 days
- Second installment: 5% in 90 days
- Third installment: 5% in 180 days
- Final installment: 5% upon Occupancy
Pro Tip: deposits are usually higher at a project’s start but becomes more flexible towards completion.
Stage 2: Sign The Purchase Agreement
The developer will present you with an Agreement of Purchase and Sale (APS) with all the sale details.
After looking it over and making sure everything is correct, all you have to do is sign it.
Stage 3: Take Advantage of The Cooling Off Period
You should do two things during this time: first, get your finances in order.
Second, get a pre-construction lawyer to review the purchase.
Pro Tip: Choosing an experienced real estate lawyer is essential, so do your research.
Stage 4: Obtain a Mortgage Pre-Approval Letter
Simple: You can’t take out an absolute mortgage because the condo is still unfinished and unregistered.
However, a mortgage pre-approval letter from your bank shows that you can afford the property.
Pro Tip: check with your developer for specifics since some require pre-approval letters to be on the bank’s official letterhead.
Stage 5: Provide Your Lawyer’s Contact Info To The Developer
There are a few reasons for this.
First, if there are any issues with the purchase agreement (and you’re still within the Cooling Off Period), your lawyer can hash them out with the developer.
Second, you’ll need your lawyer to review and sign documents during the Interim Occupancy and Final Closing stages.
Third, if you’ve negotiated an Assignment Clause to sell your property, your lawyer and developer may need to talk.
Stage 6: Customize Your Condo
Buyers can start personalizing their condo 2-3 years after signing the contract. Colours, features, finishes, layout—now is the time to unleash your creativity!
Pro Tip: if you’re building your dream home, tailor it to your unique tastes.
But if you plan on selling or leasing, consider upgrades to increase the value of your condo.
Stage 7: Pre-Delivery Inspection
During the PDI, you can carefully survey your suite and check for defects.
If you notice any flaws, tell the builder so they can fix them before Occupancy.
It would be best to note any missing, damaged, or incomplete items, such as trims and finishes.
Pro Tip: for more information, check out Tarion’s PDI Checklist, PDI video series, and brochure.
Stage 8: Interim Occupancy
This is called the Interim Occupancy period because you can move into the unit but still don’t own it.
And while there’s no mortgage, there is an occupancy fee.
This fee includes the interest on the outstanding balance (purchase price minus deposit), estimated monthly taxes, and maintenance costs.
Depending on how quickly the developer can register the condo, the Interim Occupancy period generally lasts 6-12 months.
In the case of freehold properties, buyers skip Interim Occupancy and go straight to final closing.
Stage 9: Final Closing
You pay any remaining expenses, obtain a mortgage, and transfer the title in your name.
Congratulations! You now own a brand-new condo!
Platinum Access refers to your unique relationship with a builder when you work with a team like The Realty Bulls. When a new condo is being developed, most units must be sold before the builder receives construction financing from the banks. This is a critical threshold for the builder, so there’s a great incentive to meet this requirement as soon as possible. To make this goal seamless, builders rely on Platinum Brokers Team to help sell units well in advance. In addition, most developers rely on the Platinum VIP Market, so buyers with Platinum Access often end up with tonnes of Access to pre-construction insight. Not just floor plans, but detailed specifications, first pick on some of the best views and units, sneak peeks into the customization options, and most importantly, the lowest possible prices. Platinum access is broken into stages that coincide with the development of the condo and its eventual grand public opening.
The Pre-Construction Sales Stages:
P-construction real estate is sold in the following stages:
- The FIRST release is to friends & family members of the developers.
- The SECOND release is to Platinum Realtors.
- The THIRD release is to VIP Realtors.
- The FOURTH release is to the developer’s registrants list
- The FIFTH release is for public and general Realtors
Once at least 50% of the units are sold, we enter the final phase, when the development is finally opened to the public. At this point, we often see a “Grand Public Opening,” where potential buyers are welcomed to a sales center with models, renders, and mockups. Prices for units at this point are much higher than during the Platinum Brokers phase, and all the best teams have been sold.
Platinum Realtors have a proven track record with the developer and have sold many suites, resulting in the preferred Platinum relationship. The developer will first give us Access to the Platinum Realtors and authorizes us to share the information with our registrants. Through long-standing relationships with Toronto’s Leading Developers, we can offer you access to choice suites with the best incentives at prices lower than the general public will ever see.
True First Access
Working with a TRUE AUTHORIZED Platinum Realtor will save you thousands of dollars and countless hours and guarantee you the best purchase experience.
You will be invited to exclusive events and first to view pricing, floor plans, and special Platinum incentives. This guarantees you the first choice at the lowest initial pricing and the best incentives.
How Do We Save You Time And Money?
- Access the First Release before VIP Agents, general Realtors, and the general public.
- Analysis of project, suite choice, rental & resale comparables, and market stats
- Referral to specialized pre-construction lawyers and mortgage agents
- Immediate savings with Platinum incentive programs
- Consultation on project, neighbourhood, ideal layout, and builder reputation
- Guidance during the pre-delivery inspection of your home
It makes sense to work with a professional pre-construction real estate specialist to reap these valuable benefits and save money.
We have guaranteed early Access and can offer Platinum Access to many of the most exciting new developments in Toronto and the rest of the GTA. So sign up with us to be kept in the loop as new products are always entering those first privileged stages!
You must ensure you buy from a reputable builder with an outstanding record of providing stellar customer service. Only consider a builder with awards in customer service and build quality. That way, you are certain that previous customers are happy with their purchases and found the floorplans, amenities, and build quality was what they expected. An Experienced & Platinum Real estate team that sells preconstruction knows the city’s top-rated builders and can show you the builder’s previous projects so that you can see their build quality and materials. Early Platinum access can help you get the best deal from the market at day one pricing and help navigate the sales process, negotiate the contract, and protect your interests.
The APS is a standard form that usually does not deviate at all. Builders typically do not allow any changes. Suppose you would like to review it fully and ensure you understand every section of the agreement. In that case, The Realty Bulls Team can recommend Real Estate Law services that specialize in APS and pre-construction sales to review the contract and address any concerns you may have.
Buying pre-construction real estate has some additional expenses you should budget for. The amounts will vary depending on the purchase price.
• Land transfer tax
• Legal fees
• Development charges and educational levy
• Tarion warranty enrolment fee
• Builder adjustment fees
Development levies are government charges that fund growth-related capital costs like childcare, fire facilities, police, emergency medical services, and roads. Whenever a condo is built, new pipes, trees, and even schools will be built around them to support the population. The developer passes a small amount of those costs on to the eventual owner of the condo.
An essential part of your agreement is to set a cap on these levy charges so that you, as a homeowner, are not on the hook for too much.
The Home Buyers’ Plan (HBP) program allows you to withdraw funds from your Registered Retirement Savings Plans (RRSPs) to buy or build a qualifying home for yourself or a related person with a disability. The HBP allows you to pay back the withdrawn funds within 15 years.
End-users receive no HST rebate. The price includes HST. Investors, however, are a different story. Investors must pay the HST upfront and will be reimbursed, usually within four weeks after providing the lease agreement and submitting the application to the CRA.
Along with nominal fees and expenses, there are some major ones, including:
• Land Transfer Tax: typically 2-3% of the purchase price. This tax is based on the property’s consideration price (net of HST) for pre-construction condos. You can calculate the Land Transfer Tax using this handy app.
• HST: this $24,000 tax is paid at final closing if the condo was bought for investment purposes. However, you can apply for a rebate after one year of tenancy.
• Foreign Home Buyers Tax: this 15% tax is paid upon closing by non-residents. Like the HST, rebates are available.
Add an extra 8-10% to the purchase price to cushion yourself against any budgetary surprises.
This way, you can rest confidently knowing you can afford the unit’s price.
The standard warranty in Ontario, Tarion, has provided new home warranty protection for 40 years. It’s structured to protect new home consumers and ensure that builders uphold provincial legislation. Tarion acts to educate new home buyers and owners about their warranty rights and responsibilities while fairly and impartially making warranty decisions and facilitating disputes between homeowners and buyers. In addition, they work to investigate and prosecute illegal building practices and set standards to raise accountability in the Real Estate sector.
This is where Tarion Warranty comes in. Builders are allowed to push back the move-in dates of developments but within reason. Sometimes delays occur. These delays can be unforeseeable, sometimes due to construction, sometimes due to other administrative issues, and the builder must handle the case responsibly. If a delay occurs, the buyer must alert you (written notice) of the change at least 90 days before the firm occupancy date. The builder must often compensate you if delays occur beyond permitted (and agreed-upon) timelines.
Contact us if you’re considering buying a pre-construction condo or home. We believe honesty and integrity are beyond reprieve, and we’ve based our business on offering honest, accurate advice. So let us help you navigate the ins and outs of buying a pre-construction condo or home.
Assignment sale is the sale – of an “assignment” of a contract to purchase a pre-construction unit. An assignment sale is usually applied to the pre-construction project that has not been registered yet so that no one can take ownership of the team. Only the contract can be sold.
When you purchase a pre-construction unit (Condos or Homes), you will be given an assignment clause/right as a contract. You can choose to sell your assignment before the team is even built.
Pointers for Assignment Sale:
1. Assignee/Buyer is not buying a property from Assignor – Assignee is buying the “right” to acquire property from a 3rd party (usually a builder)
2. Assignor assigns its interest and rights in the Original Agreement with the Builder (or original seller)
3. Assignor assigns the Assignee its interest in the original “deposit.”
4. Assignee “assumes” and agrees to perform all of the Assignor’s obligations under the Original Agreement
Once the building or home has been constructed and registered by the city, the ownership will be transferred to the buyer. Until then, it’s just the sale of a contract, but as you will see, there are many advantages to these kinds of sales for both the buyer and seller.
The “assignment clause” in the purchase agreement is handy when these things happen. The original buyer can pass the contract on to somebody else without accruing financial penalties.
These transactions are daily and fully legal, but whether you are the buyer or the seller, you must work with an experienced realtor and a lawyer who can protect your interests.
These deals are more complex than a conventional resale and involve the developer, the Assignor, and the Assignee. It’s a two-stage process that involves both interim occupancy and the final closing.
If you wish to buy a brand new suite in a newly built condominium in your area only to find that all condos in your chosen area have been sold out? Even if you discover that the condos you wish to own are sold, you can still buy them. That is possible with an ‘Assignment of Agreement of Purchase and Sale’ known as ‘Assignment Sale.’
A buyer who bought a new condo in the pre-construction stage a couple of years back decides to sell his condo before closing due to some reason, such as a change in financial condition, job, marital status, or wish to make a profit. However, it cannot be sold using conventional methods as City has not permitted Occupancy yet. However, the original buyer can legally assign the condo to a thirty-party buyer through ‘Assignment of Agreement of Purchase and Sale.
Some of the Advantages for Buyers:
• Options: More choices when there’s a shortage of listings in the market.
• Less Competition: Fewer people look at these types of listings.
• Peace of Mind: Fewer people looking at these sales means there’s less chance for a bidding war. You can avoid bidding wars and paying more than you can afford to outbid another buyer.
• You Become A VIP: You will likely inherit VIP incentives like the seven-year Tarion Warranty Program and other incentives from the Builder such as credits, upgrades, capped development charges, and much more.
• More Choices: Depending on how far along construction is, you may still be able to select your finishes, colours, and upgrades.
• Negotiate: Sellers usually must sell because they must drop their equity. This can give you leverage for prices, deposits, and closing dates.
• Brand New Suite: You will get your unit much faster than waiting 2-3 years, like in a typical pre-construction contract. Often the occupancy date is just a couple of months away.
• Taxes: You may also benefit from saving on taxes like GST and HST.
We love to chat about the assignment sale market, so don’t wait; call us, and let’s find you a great deal.
Benefit To The Seller (Assignor)
• Since buyers are available, especially for Toronto Condos that are high in demand, original buyers may sell their newly purchased condos for a decent profit.
• Avoids Builder closing costs, Tarion fees, and Land transfer taxes.
• Seller may not have to pay GST/HST rebate back to Builder (Consult a tax professional regarding potential GST/HST on increased unit value). However, individuals who do not intend to occupy the unit on closing must repay this rebate to the Builder. Though investors who plan to rent the team out for at least one year can claim the HST back from the Government but would still have to come up with this significant amount on closing with the Builder.
• The Seller (Assignor) avoids carrying costs such as maintenance fees, property taxes, and mortgage associated with the unit after the final closing while the property is up for sale.
• Faster return of deposit (ROI). Most assignments require that the Assignor’s initial promise to the Builder be returned when Builder executes the task. This frees up Assignor’s deposit for other investments and avoids the long wait until final closing.
• Changes in circumstances, such as a job change, marriage, the birth of children, illness, etc., can lead the original buyer to sell their condo. Therefore, it helps in relieving the contract.
Can any purchase agreement involving a real estate transaction be assigned?
Under normal circumstances, any purchase agreement can be assigned, providing the deal doesn’t prohibit it.
Is an Assignment legal?
It is legally permitted unless prohibited in writing in the original purchase and sale agreement. Sometimes, the developer may charge the Assignor a fee for this sale.
Is it necessary to get permission from the developer to assign the contract?
That depends. You need to consult your purchase agreement to get the specifics. There have been incidents where an unauthorized assignment sale has resulted in the original agreement being terminated and the deposit withheld! Generally, developers will not permit an assignment sale without their consent, so you must consult with them and a legal representative.
Is there a standard legal form for these types of sales?
Yes, there are two: OREA Form 150 Assignment of Agreement of Purchase and Sale Condominium and OREA Form 145 Assignment of Agreement of Purchase and Sale (including applicable schedules.) In most cases, the developer will have their form as well.
Will either the assignor or assignee’s lawyer services be adequate?
The Assignor and assignee must retain a lawyer with expertise in this real estate area.
Can the Assignor’s realtor market the Assignment listing on MLS or REALTOR.ca?
Sometimes. Double-check with your Builder, as it depends on whether they permit advertising.
What happens if the construction, Occupancy, closing, or unit transfer date is delayed?
In the event of a delay, the agreement is still valid. This means the assignee has agreed to take on the deal and all associated responsibilities, including delayed construction or Occupancy.
What if the assignee doesn’t close?
This is no different than any other property sale, meaning the Assignor, in most cases, is not released from the obligations under their original purchase agreement. In this situation, both the Assignor and the assignee will be liable.
What is the cost of assigning an Agreement of Purchase and Sale?
If the developer consents to the arrangement, there will generally be an administration fee and legal fees. These fees will vary. Consult the original purchase agreement and the developer for specific information.
When does the Assignor get their money?
This generally depends on the closing date and the agreement terms the Assignor and assignee agreed on. Usually, the Assignor is paid when:
• the assignee takes possession or,
• when the developer approves the process, if applicable or,
• when the assignee obtains legal title
Who gets the interest, if any, payable by the Builder on the original deposits?
Unless otherwise specified, the Assignor will likely pay the interest.
Who pays the interim occupancy costs?
Once the Assignment is finalized, the assignee will typically pay occupancy costs.
What are closing fees payable?
After registering the condominium, the Builder transfers the ownership title to the assignee. The assignee pays the balance to the Builder and any amount still owed to the Assignor. Some of the costs the Assignor may pay include:
• Estimated property taxes for up to 2 years
• Hydro/water/gas meter installation and connection charges (approx. $500–$700 per meter)
• Development charges/levies (potentially thousands of dollars)
• Tarion New Home Warranty (ranging from $600–$1,900. See Tarion website for fee structure)
• Discharge of Builder’s mortgages (approx. $200–$300 per mortgage)
• Builder’s lawyer’s Law Society charge (approx. $70)
• Two months of occupancy fees for a reserve fund
• Other amounts set out in the Agreement of Purchase and Sale
These costs are typically not financed with a mortgage. The assignee is responsible for the following additional fees:
• Legal fees and disbursements
• Land transfer tax (provincial and municipal)
• GST/HST rebate
• Municipal levies
If you’re interested in either buying or selling an assignment, you need a realtor who is experienced in finding, negotiating, and drawing up the offer for these types of sales. This means you’ve come to the right place! We have a wealth of expertise, knowledge, and resources regarding assignment sales, and we would be more than happy to discuss the idea with you.
Determining the mortgage you can carry is based on a relatively simple calculation of loan amount, down payment, interest rate, and amortization period. A good rule of thumb when figuring out your monthly housing cost is that it should not exceed 32% of your monthly family income or 40% of your monthly payment.
Many people who try to sell their home end up using a REALTOR® in the future. Before anybody decides to fly solo through this complex, time-consuming, and financially perilous process, they should consider these questions. Will you really “save” the real estate commission? When buyers see a home for sale ‘by the owner,’ they see a bargain. They imagine the REALTOR®’s fee going into their pocket, not yours. How many potential buyers will you reach? Selling a home takes more than hanging a “For Sale” sign. How will you promote your home? Will you write your ads? How will you use the Internet? MLS® and the corresponding website, www.REALTOR.ca, have changed how people search for homes, and it’s hard to court buyers without it. Do you have the time? Promoting a home is a full-time job, and you may already have one. Will you be able to take calls at any time? How about screening the callers to figure out if they’re suitable candidates? Not everybody who calls is right to walk through your home, but how do you tell? Do you know the market well enough to get the most for your home? Lacking years of experience, the average do-it-yourselfer is merely guessing at their listing price. Often they set the price too low and miss out on thousands of dollars, or they price their home too high and drive away willing buyers. Do you have the negotiation skills to keep a deal on track? Emotions can run high when an offer comes in with so much money. This is why direct seller-to-buyer sales often end in disaster. REALTORS® keep it professional and are indispensable when bargaining with buyers.
You want your home to sell for the highest price possible and timely. Here are some factors that influence the cost of your home:
- Current real estate market conditions
- The expertise and market knowledge of your real estate representative
- Hard facts such as lot size, square footage, and shape of your home
- Desirability factors, including location, exceptional amenities, and property attributes
- Selling and listing prices of comparable homes in the area
- A sophisticated real estate marketing plan
- Your level of motivation
- Conditions that do not affect the cost of your home
- The profit you wish to make from the sale
- The amount of money spent on improvements
- The original price you paid for your home