Buying a Presale
What to know when buying pre-construction?
Pre-Construction homes
So, you’re about to buy a home that hasn’t been built yet, otherwise referred to as pre-construction. Let’s chat about the ups and downs!
Pros:
- Brand spanking new home with modern amenities
- Customize your space (hello, dream kitchen!)
- Potential for value increase before you even move in
- Lower initial deposit compared to resale homes
Cons:
- Waiting game (it might be years before you move in)
- Possible construction delays or changes
- That massive Developer’s Agreement (yep, it’s a lot to read!)
- Writing those big deposit checks can feel scary
We get it – buying something that doesn’t exist yet feels like a leap of faith. But don’t worry! With the right guidance, pre-construction can be an awesome adventure. You just need to know what to focus on and where to start.
There are more joys than pitfalls in pre-construction ownership. You need to know where to start and what to pay attention to.
Dreaming of a brand-new condo? Pre-construction offers exciting perks, but know the risks too!
Understand now, thank yourself later
The paperwork
In this section, you’ll find a handy collection of the most common documents and forms you see when buying a pre-construction. We’ve included simple descriptions for each one, so you’ll know exactly what you’re looking at.
Before you dive into that shiny new BC home, let’s chat about some important stuff:
- The Developer’s Purchase Agreement: It’s a big document, but don’t worry! We’ll help you understand it.
- Assignment rights: Can you sell your contract before the building’s done? It’s crucial to know!
- Developer’s consent: Sometimes, you need their OK to assign. Let’s make sure you’re clear on this.
- Assignment fees: These can pop up if you decide to sell early. We’ll help you spot them.
- Construction delays: They happen! We’ll show you what to look for in your contract.
We know it sounds like a lot, but understanding these points now can save you from surprises later. Plus, it ensures you’re getting exactly what you want!
Developer's Contract of Purchase and Sale
In British Columbia, the contract of purchase and sale is a legal agreement that outlines the rights and responsibilities of both the buyer and seller (the developer) in a real estate deal. Once both sides sign it, the contract is legally binding. Buyers can add conditions, known as subject clauses, to check certain details about the property before fully committing to the purchase.
Developer's Disclosure Statement
A Developer’s Disclosure Statement for a presale property in British Columbia is a document that gives buyers all the important information about the project. It helps buyers understand what they’re purchasing to make an informed decision. The statement should clearly and truthfully describe everything important about the development.
Amendments to Disclosure Statement
In British Columbia, if any important information is left out, changed, or incorrectly stated in a developer’s disclosure statement, the developer must file an Amendment to update it. Every buyer who hasn’t finished their purchase must be given a copy of this updated document.
New Home Warranty
What to ask and what to watch out for
The really important stuff
Are you thinking about buying a new construction home in BC? Our blog posts cover the most common questions and challenges buyers face, providing expert insights to help you navigate the process with confidence.
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Pre-construction homes
If you can’t find the answer you need, don’t worry – ask us! We’re here and happy to help you out!
How does pre sale work in BC?
A pre-sale is when a Developer sells a Buyer a property before that property is built or completed. The Buyer purchasing the pre-sales is buying the right to a completed property built in the future.
How much do you have to put down on a presale in BC?
How much do you have to put down on a presale in BC? Generally, homebuyers will be required to put down a deposit of 5-10% of the purchase price to secure their presale. This can increase to 20-25% depending on the project.
What is the 7-day rescission period for presale homes in BC?
In British Columbia, buyers of pre-construction homes have a seven-day rescission period. This allows them to cancel the purchase agreement within seven days of signing the contract or receiving the Disclosure Statement, whichever is later. To rescind, buyers must provide the developer or brokerage with written notice.
However, this right only applies to new purchasers who have not previously received a Disclosure Statement for the development. If a buyer has already received a Disclosure Statement for the same property, they do not have a second rescission right. Deposits must be held in trust, and if the contract is rescinded properly, the deposit must be promptly refunded.
How much are lawyers' fees when buying a home in BC?
Lawyers’ fees for buying a home in BC typically range from $1,400 to $1,600 plus taxes and disbursements, bringing the total cost to around $2,800. Costs may vary based on the complexity of the transaction. It’s best to consult a real estate lawyer for an exact quote.
What is REDMA?
The Real Estate Development Marketing Act is British Columbia’s provincial real estate law that regulates the marketing and sales of new development properties and presale condos in British Columbia, Canada. This law applies to presales throughout Greater Vancouver and British Columbia.
Does a Realtor need to disclose their commission to a Buyer?
Yes. If a realtor is representing you, they are legally required to disclose any commission or remuneration they receive from a third party, including the seller. This ensures transparency and helps you make informed decisions.
Do buyers pay Realtor fees in BC?
Generally, buyers do not pay realtor fees in BC. The seller typically covers the full commission, which is then split between the listing agent and the buyer’s agent. The amount can vary depending on the property’s value and the terms negotiated between the seller and their agent.