Purchasing a pre-construction Homes suite is a major financial commitment. One of the influencing factors to consider is betting on an idea and not a physical building. Unlike going for a freehold home, you also have to worry about maintenance costs and amenities. This is why you should get all your facts right before buying a condo suite. Sadly, there are many misconceptions about buying in on condo projects. Let’s uncover them;
Highly Expensive & Not Affordable
People are generally of the opinion that purchasing pre-construction condos are expensive. It is completely untrue that a working-class couple cannot get themselves their favorite condo in the GTA. Contrary to common beliefs, buying a pre-construction condo is more cost-effective than purchasing a freehold home. This is proven to be accurate, especially in areas in the heart of Toronto.
The asking rates for single-family homes keep skyrocketing at the beginning of every housing market season. Most condo developers have affordability calculators on their pages to help clear your doubts. You’d need details of your current financial status to know the affordability rate. This would help you compare the affordability rates between condos and freehold homes.
Ridiculous Waiting Time Before Completion
Another common myth about pre-construction condos is the ridiculous waiting time before your condo gets completed. People assume it takes over a century to complete a condo project without exaggerating. They discourage potential condo owners from buying a property during the development and planning stages. Some even insinuate that they never get built.
With proper research, you’d soon discover that condos get completed in the shortest time frame. By investing with a reputable builder, you join the short list of potential owners looking to get a condo. With adequate financing, top-rated builders get the job done in due time. These experts have countermeasures to tackle unforeseen circumstances like poor weather conditions and labor strikes.
20% One-time Deposit Payment
Canadians purchasing pre-construction condos need to pay a 20% deposit. It is 35% for international buyers. For a condo suite of $400,000, you’re looking at an $80,000 one-time deposit payment. That’s a huge sum of money to pay at one even for millionaires. Trusted builders make the deposit payment flexible by spreading them over a stipulated period.
Most builders in the GTA spread their 20% deposit payments as far as 15 months. All deposit schemes and offers must fall under the Condominium Act. This protects a potential condo owner’s deposit from fraudsters. Ensure you check with the sales center and cross-check with building authorities before placing a down payment on a condo.
Losing your Deposit
It’s a known fact that developers faced bankruptcy in the past. This has caused major turmoil among potential investors looking for pre-construction condos. However, the Ontario government has helped eliminate this concern with housing regulations and acts. The Tarion Warranty Corporation, for example, protects potential homebuyers from losing their deposits.
To reassure condo buyers, the government charges a deposit protection fee under the Tarion Warranty Corporation act. This enrollment fee protects all down payments on condo suites below $20,000. With such a guarantee, homebuyers can be sure of a refund in the unlikely event of an uncompleted condo project. Families get to reduce their financial loss this way.
Uncertainties on what to expect after Payment
People often worry about getting deceived by developers before payment. With trusted and reputable developers, you need not worry about the expectations of your condo. These professionals have reputations to protect in the highly competitive real estate market. They’d never go back on their words as long as you have the details of your condo suite signed.
Review the details of the presentation during the sales exhibition. Ensure you look through the decking, floorplans, and finishes thoroughly. Never hesitate to ask questions about uncleared areas before making a deposit. It wouldn’t cost you anything to check out other condo projects by the same developer. To be sure the features align with your vision of living in a condo suite.
Hidden Charges When It's Time to Close
Homebuyers get it wrong with condo purchases by overlooking the total cost of ownership. This figure exceeds the deposit percentages or mortgage payments. Without understanding fully, people conclude that builders cheat when they bring up additional costs. Fees that include maintenance costs, utilities, property taxes, and sometimes cost for custom requests.
Developers need to include the costs of land transfer taxes, admin fees, legal fees, and development levies when closing. Lots of topics and ideologies have been raised around development levies in recent times. Builders are expected to commit to funding the city’s infrastructure through development levies. Every charge is accounted for if you look closely.
Developers could care less about Buyers
It is a common belief that builders use condo projects as get-rich-quick schemes. This might be accurate in the case of fraudulent developers, but reputable builders care about their investors. When you start to feel uncomfortable or unattended by a developer, take a minute to try other developers. Builders with great customer care services are more concerned about your interests.
Even when making inquiries from a renowned developer, be certain they have reasonable answers to your questions about the suite. As developers can have busy schedules, it makes sense to go for a builder with a care team. Their customer support team has clear-cut replies and documents to your questions and concerns about your condo suite.
Condo Suites are for Senior Citizens
There are lots of misconceptions about condo properties being for senior living communities. This myth arose decades ago when civil servants saved up to purchase condo projects. Years down the line, people still believe that condo suites are meant for aged citizens. Today, more young professionals and couples have deposits in condo projects.
The payment flexibility allows young couples to pay for their dream home in installments while working on other projects. There are more condo suites in urban locations than we’ve had in the last five years. Both young and aged individuals can purchase a condo suite provided it fits their budget. You don’t want to go around believing this myth at such a time as this.
No Pets Allowed
Topics on pets are grey areas that homeowners and investors take seriously. There are condo projects that welcome pets after completion. These building projects attract similar pet lovers to purchase other condo suites. On the other hand, some condos have strict policies against pets on the property. It all balls down to what you want in the end.
Condos that welcome pets expect homeowners to have well-behaved pets. More condominium corporations now entertain the idea of living with pets. They include the “Pets Allowed” clause in their pre-construction condo contracts so it’s visible to potential buyers. Ensure you go through the bylaws as well as the terms of the contracts before depositing the condo suite.
Condos get Demolished after 50 years
Condo demolition after 50 years has got to be the ridiculous one of them all. There’s a law binding the remodeling, reconstruction, and repair of condo projects after 50 Years. This law does not, however, enforce the demolition of any kind of condo suite after 50 Years.
Canadian law advises condo managers to oversee the modernization of their condos after a stipulated time. Concluding that the government of Canada would have your condo suite demolished after 50 years is rather outrageous.
Conclusion
People are used to purchasing or taking a mortgage plan for physically completed freehold homes. The idea of depositing on a pre-construction condo suite seems insane with lots of risks attached. On the contrary, pre-construction condos allow you to invest in a project in its infancy. This enables homebuyers to compare the facilities and features of several suites before making a down payment. It’s like building your home from the scratch.
