Look at a pre-build condo with an expert
My daughter wants to buy a pre-construction condo. Can a real estate sales rep assist her?
While your daughter may decide to deal directly with the builder of her eventual home — the sales agents in the presentation centre are employees of the builder and represent the builder’s interests — she would be well-advised to discuss her purchase with a real estate salesperson or broker if she is inexperienced in purchasing pre-construction properties.
There are other good reasons why she should work with a registered real estate salesperson.
If your daughter doesn’t have a specific building in mind, a salesperson could start by helping her find one; salespeople and brokers are often invited to builder-hosted VIP events where pre-construction units are offered for the first time.
An agent would also have full access to the Multiple Listing Service (MLS) and has likely handled similar transactions in your area, so they can evaluate the builder’s price.
An experienced real estate representative should also be able to read and explain the building plans, offer insight into the neighbourhood, estimate the various closing costs (it’s a new property, so they could be substantial), and possibly assist in negotiating the agreement.
Buying a pre-construction condo can be an exciting experience and that’s especially true when the builder creates it to your specifications.
The downside is that you have to wait for your new home to be built and sometimes there are unexpected construction delays.
We were a few months late moving into our first condo, but I must say, it was very nice to know we had picked what was important to us.
Your daughter may experience second thoughts, or her life plans could change dramatically while it is being built, so she will want to know her options for exiting the agreement ahead of time, if possible.
That means showing the agreement to a real estate lawyer who can determine if the agreement provides the buyer with an opportunity to terminate the agreement beyond the legally-required 10-day cooling-off period, during which a buyer may back out of an agreement, or to assign the unit to someone else.
Even after a building is ready for occupancy, it can take a few months for the condo corporation to be registered with the province.
As well, most pre-construction agreements contain clauses that prohibit the buyer from assigning — selling — the original contract to another buyer before the building is completed and registered.
If the sale agreement prohibits the buyer’s right to assign, the builder may be entitled to cancel the deal and keep the buyer’s initial deposit(s) if the buyer attempts to sell, assign, or list the property during this pre-registration period. From our RECO family to yours: Happy Holidays!
If you have a question for Joe about the home buying or selling process, please email askjoe@reco.on.ca.