When it comes to purchasing pre-construction in the city of Toronto, we’re going to make this real simple for you.
One, two, three — go:
Do your research before you buy!!
To put it mildly, Toronto’s market place is currently overrun with new development opportunities. You’ve seen the cranes that dot our skyline, correct?
So when considering or comparing various pre-construction projects to acquire a unit in — either as an investor or end user — doing your homework is crucial.
But where should you begin?
While there is no doubt that location, aesthetics, amenities and price will play a crucial role in your decision to buy — our recommendation is to start by learning all you can about who the developer is.
To take the necessary time to educate yourself in regards to their successes (or failures), experience and reputation.
After all, these are the people who will not just be building your property, but taking your money to help them do it.
Beyond surveying their past results and overall status, we also recommend digging a little deeper in regards to how the developer will facilitate your purchase, specifically when it comes to your pre-construction project of interest.
On that note, here are five quick, inside tips…
1) Ask the developer’s on-site sales team to inform you of how many price increases have already gone into effect since the opening of sales. Remember, once certain percentages of sales have been reached in different lines in their inventory, developers love to raise prices quickly.
2) Then ask if there is a clause in the purchase agreement that restricts you from listing your unit for rent or sale with a broker, advertising it and/or putting it on MLS prior to closing. An ‘assignment clause’ will provide you some flexibility.
3) Avoid buying close to the end of a developer’s marketing campaign, since you will most likely be paying an inflated price for the unit.
4) Examine what finishes the developer offers, especially when it comes to appliance brands, and bathroom materials, kitchen cabinetry and fixtures — they could become a decisive factor when reselling your unit.
5) Don’t forget to inquire about developer fees! It is standard practice for developers to charge one at closing. A reputable developer will be willing to cap them before you sign on the dotted line. If they don’t, it could be worth raising a red flag.