The B.C. Government has announced new legislation for the real estate industry and it's fellow participants: a "cooling off" period when it comes to buying and selling homes for resale and newly
Thinking About Buying a Presale Condo?
Dated: March 4 2021
- Go to a few presentation centres and preview the different developments. The marketing on the project can be an indication of quality. New developments are not made equal. As most new builds won't be completed, to give you a feel of your possible future home, there may be a show suite to walk through. Some new builds cater to a pet-friendly community, young families, some aim to go green while others promote the use of only Canadian products.
- Educate yourself on the developer/architect/contractor and see what previous projects they've completed. You want to consider one's with a solid reputation. To review their history, you can check out the Public Registry of Residential Builders.
- Your presale should come with New Home Warranty encompassing a 2-5-10 year plan. This encompasses 2 years on labour and materials, 5 years on the building envelope and 10 years on structure. Make sure to view the warranty by entering the address on the BC Housing New Homes Registry's website.
- Read the Developer's Disclosure Statement carefully. This document will spell out the permitted uses of the building, the purchaser's right to assign, rescind and how deposits are handled. It will also include the history of the developer. It's important for you to consider your timeline and intended use of the property and ensure it aligns with the developer's disclosure statement.
- Find out how much the monthly strata fees are and what it includes. Depending on the market, new build condo strata fees range from .25 to .55 cents per square feet. Normally they include garbage disposal, property management, recycling and grounds maintenance.
- Review the Contract of Purchase and Sale (your offer) and ensure the completion and possession dates are to your satisfaction. This is a comprehensive agreement you will sign off on during the process. Is GST included in the price? If not, there will be a 5% federal tax added on to the purchase price. Additionally, you want to know what appliances are included and clarify if a storage locker and parking stall come with the unit. If a parking stall is not included, depending on the development, uncovered/covered parking stalls range from $10,000-$40,000. In most cases, price isn't negotiable but there may be incentives. Look into the option of customizing the unit in regards to colour schemes, kitchen/bathroom finishings and flooring.
- Certain individuals are exempt from property transfer tax. The tax rate is 1% of the fair market value up to and including $200,000, 2% of the fair market value greater than $200,000 and up to and including $2,000,000 and 3% of the fair market value greater than $2,000,000. To find out if you qualify, click here.
- To adequately plan out the finances, inform your mortgage broker that you're purchasing a presale.
- When you purchase a presale, the possession date may be earlier than originally agreed upon and home ownership can be transferred to you. This is referred to as the interim occupancy period. If this is the case, you will need tenant insurance and when the completion date approaches, you will need to ensure you cancel the tenant insurance and replace it with homeowner insurance. Ensure there are no dates left uninsured.
- Ask the developer and municipality about future construction plans and zoning in the area. If you're interested in a higher floor, you want to know about the views being obstructed and anything that may affect the property value.
- A deficiency walk through is generally completed 10 days prior to your possession date. It's highly encouraged to pay for one. The home inspector will check deficiencies of the wall/flooring/doors/
paint/windows/heating as well as sealings in the kitchen/bathroom and other cosmetic defects. At this time, you'll be able to bring concerns to the developer on changes required prior to the occupancy of your unit.
Accompanied by a diligent real estate agent and this checklist will ensure you cover the many facets of presale condos. Click here to read my previous post about some new builds coming to Victoria. Reach out if you have any questions. Thanks for reading.
Raised in Victoria, Rob has fully embraced island life and culture. He spent some time living in Vancouver and LA before returning to his roots and rediscovering his love for this city. His past clie....