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What Is The Role Of A Realtor In A Pre-Construction Purchase? 

Canada has a thriving pre-construction industry. Cities like Toronto, Vancouver, and Montreal are hubs for some of the most sought-after projects, where innovation meets elegant design. If you are an aspiring investor, consider collaborating with a realtor who specialises in pre-construction. They provide invaluable insights, help you identify projects that not only align with investment goals but also promise substantial returns, and often can negotiate a better deposit structure since they already work with builders. In this blog, we hope to answer many questions that an aspiring pre-construction buyer has and guide you in making the right investment choices.

How does pre-construction work in Ontario? 

Buying pre-construction units is equally as exciting for new and seasoned investors. You’re essentially purchasing a plan, a vision of a future home or investment property. Developers in Ontario often sell properties in their projects before breaking ground. This gives them an estimate of the interest people are showing in the project. 

1. Find a pre-construction project that meets your needs

It doesn’t matter whether you’re an investor or would be residing in the unit, find a project that is actually worth the investment. Location will always be the most important aspect followed by the neighbourhood and then amenities. 

2. Judge its potential for appreciation 

Look for recently developed communities in the same neighbourhood and look at their pricing history. Check for the price set by the builder during the pre-construction phase and then for any units sold recently. 

As the building progresses, your property’s value often increases, even before you take possession. Plus, you’re buying at today’s prices, not the prices when the building is completed, which could be several years down the line.

3. Pay the initial deposit 

When you visit the builder’s office along with your real estate agent, you have to submit a bank draft while signing. It is usually between $5,000 to $15,000 and is a part of the total 15-20% deposit you’ll pay over the next few months or years. 

4. Select your customisations 

Depending on the stage of construction, you might have the option to select finishes, layouts, and upgrades, making your future property truly yours. Some builders also give you decor dollars as incentives, which cover a substantial amount of the customisation costs. 

5. Continue with your deposit payments 

When you sign the purchase agreement, you will be explained the deposit structure. Most deposit structures require you to pay at 30 to 90-day intervals, with the last deposit payment at closing. 

6. Pay all closing costs 

These costs include development levies, HST, and legal fees. Keep 1 to 3% of the purchase price for these expenses. 

7. Time to move in

If you’re considering renting out your unit at occupancy, be aware that there may be a nominal fee involved. Certain projects offer the option to lease your unit without incurring a right of occupancy fee. Alternatively, if you decide to move in, your brand-new unit will be all set and waiting for you.

How does a realtor help you in pre-construction purchases? 

When you’re venturing into the world of pre-construction purchases, having a realtor by your side can make a big difference. Here’s how I, as a realtor, can add value to your pre-construction purchase experience:

1. Market Knowledge

My deep understanding of the pre-construction market in your area of interest is invaluable. I keep abreast of the latest developments, trends, and prices, which ensures that you are making an informed decision. Whether it’s knowing which neighborhoods are up-and-coming or which developers have a reliable track record, this insight can prove pivotal in making a wise investment.

A big part of my job as a pre-construction specialises involves staying updated about  latest developments, trends, and prices. Whether it’s knowing which neighbourhoods are up-and-coming or which developers have a reliable track record, you won’t find this information online and it is important while making a wise investment.

2. Access to the Best Opportunities

Often, the best pre-construction units are sold before they are even advertised to the general public. As a realtor, I have access to VIP or early sales events, which means I can offer you the first pick of these sought-after properties. While there isn’t any price difference, early access lets you secure units with the best views. 

3. Negotiation Skills

I can negotiate on your behalf to get the best price and terms. This could include price, deposit structure, or even specific unit requests. My aim is to ensure that the deal aligns with your financial and lifestyle goals.

4. Understanding the Fine Print

As your realtor, I’ll help you understand the intricacies of these contracts, making sure you are aware of all the terms, conditions, and any potential risks involved. I can also recommend a trusted real estate lawyer with whom you can review the contract and weed out anything missed out earlier. 

5. Guidance Through the Process

From selecting the right project to finalising the deal, I guide you through each step. I assist in choosing the right unit based on your preferences and investment goals, help coordinate with mortgage brokers, lawyers, and other professionals, and keep you updated on construction progress and timelines.

6. Future Planning

Whether it’s advice on when to sell or rent the unit, I offer strategies to maximise your investment. I can also provide insights into the market’s future direction, helping you decide when it’s the right time to make your next move.

7. Personalized Service

Lastly, I offer a service tailored to your specific needs. Whether you are a first-time buyer or a seasoned investor, I take the time to understand your unique situation and offer solutions that best fit your requirements. 

How does a realtor assess market and trends in pre-construction? 

Sometimes you come across projects that are too good to be true and they are! Sometimes, smaller projects might not reach you through digital media and you miss out on a great opportunity. As a realtor in Brampton, I’ve relationships with builders across Ontario and Alberta to find projects of all sizes. Then, I handpick projects that I think my clients will benefit the most from. Here are some of my measurement parameters while choosing pre-construction projects: 

1. Economic Indicators

Economic factors such as employment rates, GDP growth, and interest rates are strong indicators of the local market and how it’ll perform when interest rates drop in the next few years. 

2. Demographic Trends

Demographics play a big role in housing market trends. For example, an area with a growing population of young professionals might have a high demand for small to medium-sized units, while regions with ageing populations may see increased demand for retirement homes or smaller condos with accessibility features. 

3. Historical Data Analysis

Historical sales data, price trends, and construction activity all help to forecast market behaviour. For example, a neighbourhood would have consistent growth in prices but a few years ago there was a quick drop. It could be due to a major construction that dropped the quality of life or a major employer moved away. 

4. Consumer Sentiment

As a realtor, I gauge public interest in pre-construction projects through surveys, focus groups, and monitoring online engagement. Positive consumer sentiment can be a strong indicator of a project’s potential success.

Can I realtor help me negotiate the selling price of a pre-construction unit? 

Yes, as a realtor I can help you with that. Keep in mind, while developers often have set prices for pre-construction units, there’s always room for negotiation, especially in aspects like unit selection, floor premiums, or potential incentives. I’ll also negotiate terms and conditions that could lead to cost savings or added value, such as upgrades or favourable payment plans. 

I hope this blog helps you understand how I help my clients secure the best units in the most profile pre-construction projects. Visit this page to view the latest pre-construction projects I’ve handpicked for you. If you have any questions or are interested in a project, please reach out to me today!

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