Buying a Pre-Construction Condo on an Plan

Here are nine crucial points to consider if you’re thinking about buying a pre-construction condo in North York. Equipping yourself with this essential knowledge will help you make the best decision for your needs and finances, as advised by GTA Realty Man.

1. Deposit Structure: Expect to pay a deposit ranging from five to 20 percent, paid in installments over time.
2. Payment Schedule: Understand the timeline for payments, which can vary from upfront to staggered over several months.
3. Phantom Rent: During interim occupancy before official ownership, you’ll pay occupancy fees but not the mortgage-a concept dubbed “phantom rent.”
4. Condo Reserve Fund: Contribute to the building’s emergency fund at closing, typically two months’ worth of fees.
5. Ten-Day Cooling Off Period: Take advantage of a grace period in certain provinces to reconsider your purchase.
6. Registration: The condo needs to be registered after construction, a process that can take months to years.
7. Inspection: You have the option to inspect your unit before finalizing the purchase.
8. Selling a Pre-Construction Unit: Assignment sales are possible but check your contract and tax obligations.
9. Closing Costs: Budget for closing costs, typically between one to three percent of the original purchase price, including builder adjustments and utility fees.