A pre-constructed condominium is an excellent way of getting a new space at a decent price. One of the advantages of getting a pre-constructed condominium is that it can be customized to match your style. Here are the things you be aware of when buying a pre-constructed condo:
1. Many pre-construction condominiums get delayed. Understand that many condo projects are not always ready at the expected time provided by the developers. Therefore, you should plan to move in six months later than the proposed move-in date.
2. Expect to put up to 20 percent down. You may buy a resale condo with as little as 5 percent down payment. But, such is not the case for pre-construction condominiums. The standard is about 15 to 20% down payment except in a few instances.
3. You will have to pay HST. Newly built condos are subject to HST, unlike resale condos. It is worth noting that your purchase may qualify for the New Housing Rebate Program of the GST/HST
4. New-build condo may attract additional closing cost. Your purchase price can be increased by 1 to 3 percent through expenses like utility connection fee, HST on new appliances, as well as builder/developer adjustment charges.
5. You may be a tenant sooner than you planned. You should also be aware that your condominium may be ready for moving in before the building project completes. In that case, the building cannot be set up as a condo corporation. Instead, you can rent the unit from a developer instead of owning it.
6. Your condo fee may rise. Condo developers attract prospective buyers with reduced monthly maintenance fees. The fees will increase after two or three years of staying in your home. These condo fees can increase significantly, so you must keep that in mind during your budget planning.
7. Lock in your mortgage rate beforehand. Developers usually work with their preferred mortgage providers. If you are in this circumstance, you will have the opportunity to lock in at current low-interest rates. This low-interest rate will come into play as soon as you close on your condominium.
8. The building may not look exactly like what you saw in the video or showroom. Developers have the right to adjust their plans. The indoor-outdoor may not be what you saw in the video as some features may be optional or at additional costs.
Speak to your real estate agent today about your condo deal to know what to expect before starting.