PRESALE/

Development

What are the benefits of a pre-sale?

More time to obtain financing for the purchase of the property.

  • When you purchase a pre-sale, you only need to have the down payment available. Depending on the contract there may be smaller payments based on a schedule, but this is dependent on the developer. Which means, you can organize your finances to make this purchase possible (consult a financial advisor and a mortgage broker, if you do not have one, CONTACT ME for a list of referrals).

Possible appreciation of your property by the time it is built.

  • Depending on the state of the market, your property may appreciate over the time that it is built.

The down payment and deposits are held in a lawyer’s trust account.

  • This restricts the developer from accessing the funds until the building is complete.

New properties are subject to mandatory home warranties and insurance.

  • This gives a buyer a minimum of two years on the labour and materials, five years on the building envelope, and ten years on the structure of the building itself. Purchasing a property already built may not come with these warranties, which could possibly increase the overall cost needed to rectify an issue.

You get a newly brand newly built home!

  • This opportunity may give you the opportunity to customize the layout, finishes, colour scheme and more to make sure the property you move into is the one you want. Especially if this is not just a house, but your HOME.

What are the possible risks of a presale and why is it important to note.

Purchasing a pre-sale as an investment does not guarantee an appreciation on your property.

  • These buildings can take YEARS to complete, and you should be aware that the market is always changing as with any property. You should not make the assumption that all pre-sales go up in value.

Most presale developments end up taking longer than expected.

  • Delays in development can sometimes range from a few months, up to years, depending on the situation. This can make it difficult to plan ahead and may cause delays for your own plans.

If a developer needs to make changes to a floor plan, materials or other design elements to comply with building codes, they usually reserve the right to make these changes without notifying you.

  • This can mean that the purchase you agreed to in the showroom can be different from the property you receive on completion.

Personal finances may change between signing the contract and the building's completion date.

  • Be sure to consult your mortgage broker for more information, if you do not have one yet, CONTACT ME and I will assist with a list of representatives to assist you.

Are you a First Time Home Buyer (FTHB)? Well there are some possible savings to note!

For newly built homes, first time home buyers are able to apply for a GST credit from the government and/or the developer. The GST in BC is equal to 5%, and as a FTHB you may be eligible for a rebate of 36% of the 5% GST. There is a full general rebate for homes that are under $350,000 that a buyer intends on living as their permanent residence, and there are partial rebates for properties up to $450,000.

For new homes valued at $350,000 the GST rebate will be calculated as follows:

Purchase Price $350,000

The gross GST is $17,500 (5% of $350,000)

The 36% GST rebate would be $6,300 (36% of $17,500)

Thus, the applicable GST is $17,500 (5% of $350,000), minus $6,300 (36% of $17,500), which equals $11,200 (GST payable after rebate).

For new homes valued between $350,000 and $450,000 the GST rebate will be calculated as follows:

$6,300 x [$450,000 - the purchase price] / $100,000

*This means that the rebate is gradually reduced, the more expensive the property is valued.

For example, let’s assume the purchase price is $420,000.

$6,300 x [$450,000 - $420,000] / $100,000 =

$6,300 x [$30,000] / $100,000 =

GST rebate = $1,890

The gross GST would be 5% of $420,000, which equals $21,000, less the rebate calculated above of $1,890, for a net tax of $19,110.

There are other First Time Home Buyer Incentives that you can use, so send me a message and we can talk about your current financial situation.

If this is an opportunity that you are interested in, CONTACT ME now! If you are interested in this current market or you want to simply inquire, please let me know and I can guide you through the entire process.

Why get a Realtor if you are interested in presales?

  • VVIP or Early Access

    • Some pre-sale are SOLD OUT in the first few days! So having a Realtor can get you an opportunity to purchase a property.

  • Deficiency Walk-through 

    • Upon completion, there is a Deficiency Walk-Through, to make sure everything is in good condition. This can include: doors, windows, walls, electrical, flooring, etc. I recommend bringing a property inspector with you so that you have a professional take a look.

  • Aware of the area itself and possible new developments.

    • Sometimes there are important developments in an area that are expected to be built such as transit, shopping areas, etc. This can have a positive or negative impact on your purchase.

  • A buyer’s agent does NOT cost you anything! You have nothing to lose by letting a buyer’s agent, such as myself, assist in your search.

If this is an opportunity that you are interested in, CONTACT ME now! If you are interested in this current market or you want to simply inquire, please let me know and I can guide you through the entire process.