Buying from the Builder…Pros and Cons
Lets face it there are advantages and disadvantages when it come to purchasing through a developer whether its a condo or a detached home.
A number of people out there are buying from builder off plan, rather than pr-existing homes or condos that are ready to move in. Buying off plan is basically purchasing a property based on the drawings and proposals submitted by the developer, usually before any work on the property has even started.
Sales from off plan in recent years have flown off the shelves, selling within 72 hours of their release. In many cases, off-plan buyers have seen their properties appreciate significantly before they have been given their keys!
The Pros:
- Buyers get into the development before it even launches which mean lower prices per square foot. The overall price for the property is much lower then it would be then buying it as re-sale.
-Flexible payment structure. Most developers require a minimum of 15% until closing, some even can work a better payment plan. This is also good where you can budget yourself, you have some time to put together each deposit because its not all required at the same time.
-You get to take advantage of developer incentives, could be cash back on closing, 3 years free condo fees, upgraded finishes and much more.
- You are able to choose from a variety of floor plans. In some cases the developer will allow you to add some of your personal touch to the floor plan with some minor changes to the layout.
The Cons:
- Delays in construction- closing can be pushed several months. This could be due to good old mother nature.
-Can be risky, your buying something you don’t see physically.It can be tough at time to visualize. You have to base your purchase by word of mouth and reputation of the developer.
Some other things to keep in mind:
-Read all the documents before signing, especially the sales and purchase agreement, which contains important information about proof of ownership, resale restrictions, penalty clauses, and building delay penalties. Buyers should be clear about the details of all of these provisions.
-Research the developer, find out what other developments they have completed and what the overall satisfaction is.
