Availability – Access is everything. Units for sale are based on availability of inventory at the time you’ve gained access to the sales floor at the presentation centre. Provided that you are at the presentation centre, you are positioned quite favourably in terms of different units and floorplans you can choose from. The earlier you are in the queue, the more inventory you can select from. Unlike a detached home where buyers compete for one home, in the presales world, you essentially have a set of floorplans to choose from with the floor levels being the unique factor. Here, you have a greater chance of getting what you want.
Avoid Multiple Offer Situation – All the prices offered to you is fixed. You are not bidding for a specific unit like in a multiple offer situation for detached homes. You ask for availability, and in that exact moment, you will be given a purchase price for that specific available unit. The quoted price IS the price you can take it home for. Skip nuances of offers and counter-offers, and go straight for the purchase.
Flexibility in Finances – Presale developments usually have a scheduled deposit structure. For example, some developers may require a $10,000 deposit on writing, balance of 10% of the purchase price at the end of seven (7) days, additional 5% after six (6) months, and another 5% after another six (6) months. In this scenario, you will only need to pay 20% within one (1) year to own a strata unit. This means, the rest of the 80% will be covered by your mortgage financing just before completion, which leaves you with more cash-flow between now and the completion date of your contract. If you wish to have less of your funds tide up in an investment, pre-construction real estate may fit your needs (of course, always seek the advice of your financial advisor when it comes to structuring your investment portfolio).
Tax Savings and Rebates – See I’m a First Time Home Buyer (FTHB), any grants and rebates I should be aware of? (FAQ) for an extensive list of tax savings programs you may be qualified for.
The Wait – The marketing and sales of a pre-construction development are both commonly done 2-3 years before scheduled completion. Your plans may change during the course of time. The market may change as well. Before jumping in, take a moment to assess your risk tolerance when making such an investment. Is Vancouver currently a buyer’s or seller’s market? Is the market volatile in detached, attached condominiums, and/or attached townhomes? Which area of the city is being affect most by factors like government policies, interest rates, and unemployment rates?
Always talk to your financial adviser before making major real estate decisions and build that relationship with your realtor so that you can have a conversation what is happening in the market.
Discrepancies – Ask, ask, and ask. At the sales centre, always ask what will and will not be included at the time of possession of your home. Don’t be afraid to ask, as you would not be if you were to buy a detached home in a multiple offer situation (items to be included and excluded are usually listed in the Chattels and Fixtures section of your Contract of Purchase and Sale). It is not uncommon for certain appliances, shelving, and design features that are displayed in the showroom to be not included in your purchase.
It is imperative you have a realtor who will represent you in your best interests. He/she will ask the tougher questions, point out glaring issues from the Disclosure Statement, and guide you in making sound real estate decisions. A good real estate agent is always going to be one who will freely bring you to different presale developments and help you determine which real estate decision is best for you.