With condo prices continuing do defy trends in Markham’s real estate market, buying a pre-sale condo can have its advantages. But, especially for first-time home buyers, learning more about how presale condos work is important if you want to avoid any unpleasant surprises.
What is a Presale Condo?
Also known as a pre-construction condo, when you buy a presale condo, you purchase the property before the condominium building is constructed or when it is still under construction.
3 Tips for Purchasing a Pre-Construction Condo in Markham
While no two presale property transactions are exactly the same, here are the main parts of the process that you should be prepared for.
- The Deposit – Be ready to make a deposit of up to 20% of the purchase price when you sign the purchase agreement. The deposit structure can be different from project to project. Usually, a 5% down payment is required on signing, with a pre-set amount, like $3,000 or $5,000, due immediately on signing and the remainder up to 5%, due within two weeks after signing.
- The 10-Day Cooling-Off Clause – Ontario condo buyers are entitled to a 10-day cooling off period during which you can cancel the purchase agreement. Also known as a 10 day rescission period, if you choose to withdraw during the cooling-off period, you are entitled to have your deposit refunded.
- Delays in Condo Construction – Construction deadlines are rarely met. While the builder will give you an expected completion date, you should expect delays of at least three to six months.
In Part 2 of “How Do Presale Condos Work”, we’ll look at more aspects of buying pre-construction condos including what happens when there’s changes in the building plans, your interim occupancy period and condo registration.
If you like this post, check out our recent article on why the real estate market for condominium apartments is booming.