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Considering a Pre-Sale Home?

 

Purchasing a home is a very strong drive for Canadians and a deep routed cultural trend in this country. Nearly 1/3 of all homes sold each year are new construction and the new construction market is booming!

 

There are quite a few things to keep in mind when it comes to deciding on whether to buy a new construction or to buy a previously owned home in an established neighbourhood. Here are a few things to consider when buying new:

 

1. Do Your Research

  • You must be extremely diligent when it comes to pre-sale homes because of the overwhelming amount of bad developers.
  • Review all the contracts, statements, terms and conditions, etc regarding the sale of the property. Some developers wipe their hands clean once a unit or property is sold.
  • Explore the area and neighbourhood. Some construction projects are built on unsuitable land and others in undesirable areas.
2. Understand the Risks
  • Tax. All new construction in BC has GST (5%) applied and if you are not a first time home buyer you will also have to consider Property Transfer Tax (PTT).
  • Consider the market. Sometimes you can put a down payment on a property that takes 1 or 2 years to complete and in that time the market has dropped substantially. You cannot withdraw without financial and legal consequences.
  • Construction. You are never guaranteed a completion date and you may be moving into a construction zone depending on how many phases or other buildings are being constructed around you.
3. Advantages to Buying New
  • You can customize your home within the developers specifications and scope of the work. You also get warranties with your purchase, usually a 2-5-10 warranty.
  • You getting the latest trends and electronics on the market and have access to new materials that are usually in high demand.
  • You have a New home!

 

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