As Canada is currently in a housing crisis with home inventory levels dropping to record-setting lows, and the price for single-family homes reaching new heights, many Canadians are turning to the pre-construction condo market for their next home purchase.
New developments are always in construction, which might make them more feasible for someone who wants to enter the market or even downsize from their current family home. But are there any other benefits of buying pre-construction condos? Let’s take a closer look.
What is Pre-Construction and How is it Different?
Buying a pre-construction condo is different from buying a resale home. The most obvious difference is that when you are purchasing a pre-con home, you are essentially buying the idea of a home. In most cases, the property hasn’t even been built yet and you are essentially signing your name up to own the condo once construction is complete.
With a resale home, you are buying a home that someone else has lived in before. You are able to tour the property and see it in person, and most of the work has already been done. You can also move in more quickly than you could with a pre-construction home.
In a pre-construction sale, you might be relying more on showrooms, renderings, and samples from the builder to make your purchasing decisions. Additionally, depending on when you purchase, you might be waiting months or in extreme cases, over a year before moving in.
Looking for condos for sale in the Hamilton area? Check out our Hamilton condo guide here.
What are the Benefits of Buying Pre-Construction Condos?
Despite the fact that sometimes you might have to wait a little longer to take possession, there is a definite benefit to buying a pre-construction condo. If you want to be the first person to live in an exclusive, brand-new residence, the wait will probably be worth it for you in the end. Some of the other benefits of buying pre-construction condos include:
Appreciation
One of the nice things about buying a pre-construction condo is that the value of the condo will almost always appreciate immediately after construction is complete. As a result, a pre-construction condo is typically a pretty safe investment for buyers and it’s advantageous to buy when it’s in the pre-construction phase with a lower price.
Customization
If you’ve ever toured a resale home and thought, “this house is perfect, but I wish it had different countertops, or different light fixtures,” well then a pre-construction condo might be for you. Most pre-con projects enable you to make some of the aesthetic choices to create your own custom look. Options such as cabinetry, appliances, light fixtures, countertop materials, and paint colour, are just a few of the features that you can potentially customize.
Warranty
Unlike purchasing a resale home, most pre-construction projects come with a warranty. This means if anything goes wrong, in the specified timeframe, you are covered for repairs. With a resale home, this is not the case. You would be on the hook for any repairs once you take possession of the home.
This is why everyone advocates for home inspections before purchasing. That way, you know exactly what you are getting into. However, home inspections on pre-construction properties are also a good idea. Just to ensure that you won’t experience any surprises and need to take advantage of any warranty items once you take possession. Even though you are covered by a warranty, it’s still a hassle if something in your brand-new condo goes wrong.
Can You Sell a Pre-Construction Condo?
Buying a pre-construction home and then selling it before you officially take possession is known as an “Assignment Sale.” This transaction is common in the pre-construction world. Essentially, the original purchaser of the condo–the assignor–transfers all the rights and obligations of the purchase agreement to an assignee before the assignor officially closes on the property.
There are two main reasons why someone would want to facilitate an assignment sale:
- Their circumstances have changed and they no longer wish the own the property.
- They purchased the pre-con property as an investment and they want to take advantage of its rapid appreciation.
Although when buying a pre-con home, you will need to wait for the construction to finish, a great benefit of buying a pre-construction condo is that if you change your mind or want to make a strategic move before closing, you have that option as well.
Check out our new developments for sale in Hamilton right here.
How to Find a Pre-Construction Condo in Hamilton
Hamilton is currently experiencing great growth in the city. The area is rich with new developments and pre-construction condos are becoming more and more popular with buyers. Recent news of Hamilton freezing the urban city limits should also make pre-construction condo projects even more accessible in the future. As builders will be forced to build up rather than out of the city limits.
The first step in finding a pre-construction condo in Hamilton is to do some neighbourhood research. Find out which local neighbourhoods appeal to you. Once you have a shortlist of the places you’d like to live, next start to look for pre-construction developments in those areas.
Interested in learning more about the best neighbourhoods in Hamilton? Browse our neighbourhood guides here.
A seasoned real estate agency in Hamilton with experience in pre-construction can help with this. At Michael St. Jean Realty, we have a great relationship with local builders and developers. In fact, many choose us to be their official sales partner.
Take a look at our latest coming soon developments in Hamilton right here.
Do You Need a Real Estate Agent to Buy a Pre-Construction Condo?
Many people believe that a benefit of buying pre-construction condos is that you can do so without the help of a real estate agent. You simply walk into a showroom and make the purchase. While this might be technically true, it’s certainly not recommended.
Here’s why.
A new development showroom is set up for the builder. Their main goal is to sell condos, no matter what. A real estate agent’s main goal is to advocate for you and ensure you are well-represented and protected during a real estate transaction.
See the difference?
With their experience, market knowledge, and savvy, a real estate agent will make sure you get the best possible deal. They will ensure every detail is covered and that your purchase goes smoothly from start to finish. Additionally, since buyers do not pay real estate agent commissions in Ontario, there is literally no reason to not use a real estate agent during a pre-construction transaction.
Learn more about condo real estate in Hamilton, Ontario right here.
Can You Negotiate Buying a Pre-Construction Condo?
While there are many benefits to buying pre-construction condos, there is one downside that you should consider–negotiations. Unlike a resale home where the price is based on a combination of market research, home valuation, and buyer demand, the price of a pre-construction condo is set by the builder and often also has HST added on top!
This might discourage some buyers from purchasing a pre-con condo if they like the idea of negotiating on price.
However, there still are some things you can negotiate. Most builders are open to negotiating things like upgrades. For example, perhaps you want the marble countertops over the standard granite. Or perhaps you want engineered hardwood floors over the basic laminate flooring package. These are all often open to negotiation. A skilled and experienced real estate agent can help you navigate the art of negotiating pre-construction condo upgrades.
Thinking about buying a pre-construction condo in Hamilton? Michael St. Jean Realty has you covered. You can learn more about our pre-construction services by calling 1-844-484-SOLD or emailing us here.
