What is a Vancouver Presale and Why Buy One?

Curious about Vancouver presales? A presale involves purchasing a condo unit before its completion, granting you rights to the future property. While you commit to paying the full purchase price, you only need to pay a deposit upfront. This deposit, typically 5-10% of the purchase price at the time of purchase, with additional installments during construction, is securely held in a trust account until completion. Worried about the security of your investment? Rest assured, if the developer fails to complete the project, your full deposit will be returned.

Why would anyone buy a condo that does not yet exist?

The allure of presales lies in several advantages: you gain possession of a brand-new property upon completion, often with customization options not available in the resale market. Plus, you lock in a purchase price, potentially benefiting from a rising real estate market without immediate mortgage payments, property taxes, or maintenance fees.

Is it safe to buy a condo that does not yet exist?

Absolutely! Governed by the Real Estate Development Marketing Act, the presale market in British Columbia ensures robust buyer protection. Buyers have a 7-day rescission period after offer acceptance, ensuring the right to cancel the contract for any reason. Moreover, your deposit remains untouched until construction completion, and developers must provide a comprehensive Disclosure Statement outlining crucial details about the property.

What are the advantages of presale properties for investors?

Presale properties offer investors an array of benefits, including:

1. Leverage: Secure a property with a minimal deposit and potentially reap significant returns upon completion.

2. Low Hassle Investing: Enjoy capital appreciation without tenant concerns, property taxes, or monthly maintenance fees.

3. Low Cost of Ownership: New condos require fewer repairs and maintenance, minimizing ownership costs.

4. Warranty Protection: BC's 2-5-10 Year Home Warranty Insurance covers new construction, offering peace of mind.

5. Tenant Appeal: Newer buildings attract tenants willing to pay a premium for modern amenities and conveniences.

6. Higher Rent Potential: Newly built units often command higher rents due to their appeal.

Vancouver Presales

Curious about Vancouver presales? Here's everything you need to know!

What defines a presale condo in Vancouver?

A presale condo refers to a unit sold before its construction is finished, enabling buyers to invest in the property's development at an early stage. This offers the advantage of providing input on finishes and the potential for market value appreciation before completion. Thinking of buying one? Make sure you know these three most important things before buying a presale in Vancouver Real Estate.

How is the deposit structure typically organized for presale condos?

The deposit for presale condos typically falls within the range of 5-20% of the purchase price, paid in installments. This deposit secures your purchase and is securely held in a trust account until the project reaches completion.

What are the benefits of purchasing a presale condo?

Buyers of presale condos can benefit from newer properties equipped with modern amenities, the opportunity for customization, and the potential for significant appreciation in property value upon completion of the development.

Can I transfer my presale contract before the project is finished?

Yes, you can sell your presale contract, also known as an assignment. However, this process is subject to approval from the developer and may involve specific regulations regarding taxes and fees.

What risks are associated with buying presale condos?

While presale condos offer potential for lucrative investments, there are inherent risks such as construction delays, fluctuations in market conditions, or discrepancies between the final product and initial plans.

What legal safeguards are available to buyers of presale condos in Vancouver?

The Real Estate Development Marketing Act (REDMA) provides protections including a 7-day rescission period, safeguarding deposits and setting forth requirements for disclosure statements from developers.

How can I finance the purchase of a presale condo?

Financing a presale condo typically involves securing mortgage approval closer to the completion date. Initially, buyers are required to pay a deposit rather than the full mortgage amount.

What should buyers look for in a presale contract?

Essential details to scrutinize in a presale contract include completion dates, deposit structures, warranties, assignment rights, and any clauses allowing for alterations in finishes or construction details.

How do GST and property taxes apply to presale condos?

GST is applicable to new properties, including presale condos, with potential rebates based on the purchase price. Property taxes become applicable upon taking possession of the property.

What happens if the developer fails to complete the project?

In such scenarios, deposits are protected and must be returned to buyers. Additionally, developers are often required to have insurance or guarantees in place to safeguard buyers' investments.

Can presale contracts be transferred?

Yes, presale contracts can be transferred through a process called assignment. The first step is to review the contract to determine if assignments are permitted.