COMPLETE GUIDE TO PURCHASING PRE-CONSTRUCTION PROPERTIES
WHAT IS A
PRE-CONSTRUCTION PROPERTY?
A pre-construction property refers to a real estate development that is still in the planning and construction stages before it's completion. It typically includes residential structures like condos, houses, or apartment buildings. It’s a property built from the ground up and has not yet been finished or made available for occupancy.
BENEFITS OF BUYING
PRE-CONSTRUCTION PROPERTIES
✅ Lower Initial Costs
✅ Appreciation Potential
✅ Unit Customization
✅ New & Modern Features
✅ Lower Maintenance Costs
✅ Potential Rental Income
✅ Long-Term Investment
✅ No Bidding Wars or Unconditional Offers
TEN STEPS TO BUYING
PRE-CONSTRUCTION PROPERTIES
01. FIND A PRE-CONSTRUCTION REALTOR
You will receive platinum access through our dedicated pre-construction division at HADDEN HOMES. Our pre-construction specialists have a unique sales process for selling new construction properties. A group of Realtors known as “Platinums” specialize exclusively in selling preconstruction projects. These Realtors have long-standing relationships with developers and their inside sales teams and can offer their clients the absolute best access, pricing, and incentives for each project.
Our pre-construction specialists will also be able to responsibly guide you to the best sites with the most reputable builders to protect you and your investment.
When buying a new construction property, your Realtor is your key to success.
02. KEEP AN EYE ON PROJECT EMAILS
When it comes to securing first access to any project, it’s essential to be on the lookout for project-related emails! Respond to any project emails you are interested in to ensure you get exclusive access to current and upcoming project unit allocations. Access to each project is typically granted on a first-come, first-served basis, so make sure to inform your Realtor as soon as a project catches your attention.
What is the difference between a “coming soon” project and a “launched project”?
A “coming soon” project precedes the official “project launch.” It’s a way to generate excitement and identify interested parties early on. If you show interest during this stage, you will have first access to purchasing a unit before the project is presented to the public. The “project launch” is the full-fledged release of information and sales opportunities to the public.
03. PROJECT DETAILS & SUITE CHOICES
This is the fun part – together with your agent, you will review the project details to ensure they match your lifestyle.
Once you’ve decided to proceed with the project, you will pick your top three floor plans and suite styles that best fit your lifestyle while weighing the pros and cons of each.
Rest assured, your Realtor will accompany you every step of the way, offering expert guidance to ensure that this purchase stands as a secure and promising investment for your future.
04. SUBMIT YOUR WORKSHEET
A worksheet serves as a document outlining your preferred top three unit selections and essential personal details.
Your Realtor will assist you in navigating through this process and subsequently submit the worksheet to the builder on your behalf.
It’s important to remember that submitting the worksheet does not immediately entail making a unit purchase.
Rather, it signals your genuine interest in purchasing a condo and expresses your desire to reserve a unit for you.
Note: The builder may request a Bank Draft with your worksheet to determine eligibility. This bank draft will only be delivered if you are successfully allocated a suite and is refundable if you decide not to purchase.
05. UNIT ALLOTMENT & AGREEMENT SIGNING
Congratulations, you have been allocated a suite!
If you decide to proceed with the purchase, you will meet with your Realtor at the project’s sales centre to sign the Agreement of Purchase and Sale.
Remember to bring your bank draft, government-issued photo ID, and chequebook to ensure you have everything you need to purchase the unit.
You will provide post-dated cheques that will be cashed upon each agreed deposit date.
Note: Sometimes, interested parties may not be allotted their desired suite choice. You may always decide not to proceed with the purchase if the unit does not meet your needs.
06. “COOLING OFF” PERIOD & LEGAL REVIEW
The 10-day “Cooling O” period comes into effect right after you’ve signed the agreement.
This period allows you to review the contract with your lawyer to ensure all the provisions are satisfactory.
By law, you are granted total protection during this period while keeping the unit on hold under your name.
This period is also a valuable opportunity to speak with your financial institution and receive a mortgage pre-approval or commitment letter.
It’s essential to highlight that within these ten days, you retain the flexibility to opt out of the contract without incurring any financial repercussions.
In such a scenario, you would complete a rescission letter, prompting the return of your post-dated cheques.
07. SECURE FINANCING
As the condominium is not registered yet, you cannot officially register your mortgage.
However, once the 10-day “Cooling Off” period has lapsed, getting a mortgage pre-approval or commitment letter from your financial institution to guarantee your ability to secure a loan when the registration phase commences is critical.
08. FIRST DEPOSIT MADE
Should you choose to proceed with the purchase after the cooling-off period, your initial cheque will be processed for deposit on the 11th day following the agreement’s signing.
Subsequently, your post-dated cheques will be processed on the predetermined dates until the ultimate closing.
You will be issued a receipt confirming the deposit for each cheque that is cashed.
09. SELECT YOUR FINISHES
During the construction phase of the building, you will have the opportunity to visit the builder’s design center. Here, you can make selections for your finishes and explore optional upgrades.
This appointment is a chance to add your personal touch and customize your upcoming home.
10. INTERIM OCCUPANCY & FINAL CLOSING
Interim Occupancy signifies the moment when you can move into your new residence, even though the formal property title is pending due to the condominium's ongoing registration process.
Throughout this phase, you will pay monthly interim occupancy fees to the developer.
These fees encompass estimated property taxes, anticipated condo fees, and interest on the outstanding balance of the property’s purchase price.
Once the condominium’s registration is completed, a formal meeting will be arranged with your legal counsel.
You will sign the closing documents during this meeting, officially transferring the property title to you.
This milestone initiates the commencement of your mortgage payments and entails settling any requisite closing costs.
THE PRE-CONSTRUCTION GLOSSARY
10-Day Cooling Period
A 10-day period allows buyers to review the contract with their lawyer, speak to their financial institution to obtain their mortgage preapproval or commitment letter, and ultimately decide if they want to proceed with the purchase. If the buyer chooses not to proceed with the unit purchase, they will not be charged a penalty.
Agreement of Purchase and Sale (APS)
A written agreement between two parties to purchase and sell a property.
Assignor
Our pricing varies depending on [what factors affect your price]. We offer a variety of options to fit your needs and budget. Please visit our [pricing page/contact us] for more information.
Assignee
Our strength as a company comes from the strength of our leadership - an experienced and long-tenured team.
Assignment Sale
A type of sale occurs when the original buyer of a pre-construction unit sells their rights and obligations of the Agreement of Purchase and Sale to another individual or entity. This occurs before the original owner takes the title of the unit and before the condominium has finished construction.
Occupancy Date
When the buyer purchases a pre-con unit, the builder must adhere to four specific occupancy dates: the First Tentative Occupancy Date, the Final Tentative Occupancy Date, the Firm Occupancy Date, and the Outside Occupancy Date. If the builder is delayed beyond the Outside Occupancy Date, the buyer would be eligible for compensation under the Tarion Warranty Program.
FINAL CLOSING
Once the city has completed their final property inspection of the building and the property, the building is officially registered. Buyers will now receive title to their home and will begin paying monthly mortgage payments.
