When deciding to buy a condo, there is a mix of pre-construction condos (not yet built) and resale condos to choose from. And before making a decision, it is helpful to understand the pros and cons for both situation.
Buying a resale
This is the most straightforward way to buy a condo. Advantages include:
- You have the opportunity to visit the condo and get a feel for it.
- You may review documents pertaining to the property, such as maintenance fees, any outstanding balance owed by that particular unit, and upcoming special assessments, to ensure you are investing in well built, well managed, financially secure property.
- Your agent will also be able to show you comparable properties and provide you with a list of recent sales to show you what you can expect to pay for the particular property as well as justify the price of the offer you will make.
- You can get your mortgage pre-approved right away and calculate your monthly payment based on the current rate.
- There is no wait. You get to move in as soon as you close.
But there are some disadvantages, too:
- You may end up in a bidding war for a good property, or may have to drop out when the price goes over your limit. (Selling prices for condos purchased pre-construction from the builder are fixed.)
- If the unit has been lived in for more than a few years, you might need to set aside money for renovations.
There are also advantages to buy a presale condo directly from developer.
- Selling prices for condos purchased pre-construction from the builder are fixed. If you buy at early stages of construction you will secure a really great price, and sometimes get incentives from developer.
- You are first owner of the unit and you get to select the interior finish (such as colour schemes, appliances, cabinetry, flooring).
- You have more time to save up for your condo. You pay the builder a series of payments as a deposit. The deposit usually adds up to 20 to 25% of the purchase price by the time of occupancy, depending on the builder’s deposit structure.
And, there are disadvantages:
- You are buying based only on a floor plan without seeing outside view of the building.
- You have to wait until construction is complete before you take possession.
- Buying a pre-construction property is subject to HST.
- (In some rare cases), there is a chance that the developer won’t sell enough units to proceed with construction, or can’t finish construction for some other reason, so you don’t get your condo.