Buying any home can be both costly and complex, and it’s always advisable to thoroughly understand your purchase agreement. However, this can be trickier when purchasing a pre-construction property, which is something naive buyers may be unaware of.
A cursory glance at Toronto’s skyline will tell you that the city’s condo boom is showing no signs of slowing down anytime soon; with cranes ubiquitous across the GTA, there are a lot of buyers still electing to purchase a home sight unseen.
There are advantages to that of course, as choosing your own brand new fixtures and fittings is certainly a draw. But there are added considerations to take into account when buying a new build rather than a resale –- considerations that could leave a buyer badly out of pocket down the line.
While buyers can walk into any sales centre and purchase a unit on their own, it’s for this reason that working with an agent is a smart move when purchasing a pre-construction condo.
An Agent Can Help You Avoid Extra Fees
Ferdows Sadeghyar, a real estate agent with Zoocasa, speaks from personal experience when he discusses the potential pitfalls of buying a pre-construction property without proper representation.
“The biggest mistake I made was to buy a condo and not use a real estate agent,” he says. “It was before I became an agent, so I wasn’t aware of all the fees that were involved with buying a condo. When you go into a sales centre the sales agents don’t tell you that information unless you ask. In my case, I paid an extra $13,000 in closing fees.”
Condos especially have a raft of extra fees that an inexperienced buyer may not account for. Sadeghyar found himself in that situation when he bought his Mississauga condo in 2014, and it’s an experience that would shape his future career.
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“It left me in a rut and I had to gather funds from my family,” he says. “I was not expecting closing fees to be anywhere near that high. There are a lot of levies that you have with new construction, for water lines, gas, so it would have helped if I had an agent to advise me.”
They’ll Handle the Documentation
Buying a home entails documentation and lots of it, so the experience can be overwhelming for buyers, particularly if it is their first time. A sales agent therefore provides advice not only of the property’s true market value, but also the final cost after a myriad of closing fees are added in.
A skilled realtor is also well versed in building plans, and will be able to identify if all the necessary amenities are present and accounted for. Then there are issues like an assignment on a property, whereby a buyer may be eligible to sell the rights to property in the period between the interim occupancy and the full registration. These type of arrangements are at the discretion of the builder, and these are the type of questions that need to be ironed out before you sign any contract.
Related Read: How to Sell a Condo on Assignment
They Have a Duty to Protect Their Client
Now that he is the one offering guidance, he looks back on buying his first home as a learning experience, and one all buyers should take heed of.
“When a buyer goes into a sales centre, an agent will know what unit will be the best investment for the future,” he says. “Agents also have access to properties before they are released to the general public. There are VIP events for real estate agents, friends and family, and prices usually increase between the first and the second phase when it is released to the general public.”
