Buying a Presale Condo in Vancouver: Pros & Cons

Buying a Presale Condo in Vancouver: Pros & Cons

Buying a Pre-sale Condo in Vancouver?


Buying a Pre-sale Condo in Vancouver?

Are you thinking of purchasing a pre-sale condo? It is enticing when you see all of the pre-sale development units popping up everywhere in the Lower Mainland. But how does it work?

When you decide to purchase a pre-sale condo, you are entering into a contact for the right to receive and a commitment to pay for a completed condo at a fixed point in the future. This poses for some great opportunities and also risk.

Pros

  • Pay smaller deposit up-front
  • Allows you to save more money while condo is being built
  • You don’t have to pay the remaining balance until you move in
  • Customization with layout, finishes, and elements
  • New Home = No Repair Cost
  • Covered under the BC government 2-5-10 Year Home Warranty Insurance Program

In a rising hot real estate market, your condo is already worth more than what you agreed to pay for!

Cons

  • In a softening market you condo might not be worth as much as you purchased it for
  • Mortgage rates can change by the time you complete the sale
  • When the federal government administered tighter mortgage guidelines, people found that they did not qualify for the amount they were pre-approved for by the time they have to pay the balance
  • Unexpected construction delays
  • Condos that do not get built

What can you do if you can’t raise the extra amount to complete the sale? What if your condo is worth less than what you owe when the remainder was due? Unless the developer breaches the terms of your agreement when you signed on the dotted line, you are legally required to complete the sale or forfeit your deposit.

Alleviating Risks of Buying Pre-sale Condos in Vancouver

With all that said, you can also alleviate these potential risks when looking into the pre-sale market. Stay tuned for Part 2…


Our Vancouver Real Estate Agents

Empyr Living is a boutique real estate agency in Vancouver, BC. Our real estate agents are experienced specialists in buying and selling real estate in Vancouver.

Looking for a house for sale in Vancouver? We can help. Call us at (604) 889-3368 today!

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