Typically, developers do not directly sell pre-construction properties to consumers. Instead, they rely on VIP Platinum brokerages to handle the marketing and sales efforts. Buying a pre-construction property is a completely different process from purchasing a regular home on MLS. Here are the steps involved in buying a pre-construction property:
Step 1 – Work with a Trusted Platinum Brokerage
To secure a unit in a high-demand pre-construction property, it’s essential to work with a trusted platinum brokerage that has good relationships with developers. They can help you secure an allocation and navigate the process.
Step 2 – Learn About the Project
Before the project is launched, research it to understand its location and surroundings. At this stage, floor plans and pricing are not yet available.
Step 3 – Project Launched and Worksheet Submission
Once the project is launched, the developer will start accepting worksheets, which include general pricing and floor plans. If you like a floorplan, you can reserve a unit using the worksheet. The developer will try to give an allocation that matches your desired floorplan.
Step 4 – Signing and Financial
If you accept the allocation that was assigned to you, the next step is to sign the official contract. For pre-construction condos, you will have a 10-day cooling-off period to change your mind and rescind from the contract. Within 24 hours of the contract being signed, you will have to provide a bank draft and post-dated cheques to the developer. The final step is to obtain a pre-approval from an approved financial institution.
Buying pre-construction properties allows you to enjoy the appreciation with little money down, no mortgage, and no tenant, making it a great way to invest. For those who are new to real estate investment, this could be a good starting point.