October 22, 2014
4 Mistakes to Avoid when Buying a Pre-Built Condo
It is always exciting to go into the sales centers that are set up by condo developers. You get to see model suites first hand and the detailed scale model of what the entire condominium complex will look like when it is completed. It is also interesting to look at all the different finishing’s and fixtures that are on available. The sales staff are friendly and the atmosphere is welcoming.
Pre-built condos offer an excellent investment opportunity for buyers. You can make money by buying a unit and selling it as an assignment on paper even before the condo is built! People have made tens of thousands of dollars just doing this alone. If you plan to live in the condo, buying pre-built will ensure you get the best price.
Here are 4 mistakes to avoid when thinking about buying a pre-built condo unit:
Going into the sales center the first time without your Real Estate Agent is a big mistake! Do not go to the sales center the first time without your agent because they will get you to sign a document that will take away your right to use your agent in the negotiation process. Please let your agent go with you to sign you up!! Bringing your buyer agent with you will not cost you a dime and your agent will help with all the negotiations. Remember – the sales people in the sales center represents the interests of the developer!
Thinking that you are getting a good price when the units are more than 60 % sold out. The truth is as the units are sold the price goes up and up. This is why investors make money by selling units as assignments. The builder must sell a certain number of units fast to ensure they are fully backed by their financers. The rest of the units they sell off slowly at a higher price. It is best to buy a unit right at the very beginning.
Not having a lawyer look over the sales agreement. You have every right to have your lawyer look over the builder’s agreement of sale. You should go over this with your lawyer and your Real Estate Agent to see if your interests are being protected.
Believing that the condo will actually be finished when they are telling you it is going to be finished. Condo buildings are rarely – if ever – completed on time. It is typical for the building time to be extended by a year or even more.