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Spadoink posted:I am looking to buy a pre-construction unit in Toronto, and need more information. We are the only ones in our circle that have ever considered buying pre-construction, and I don't have handy access to information resources - the internet mainly provides me with lists of pros/cons, and a few generalities to the process, so I'm hoping to find more help here. I do understand the difference between occupancy and ownership, and am lucky to live in Ontario with our Tarion warranty for new builds. Before you sign anything you generally talk about what floor plan/upgrades you want and factor all of that in before you sign anything. Your "contract" will be about 40 pages long and will generally be heavily one-sides towards the builder. Pay close attention to what penalties there are for the builder being late. Generally speaking they can delay the closing date a set number of times for x number of months each time before they start incurring penalties. Also get a real estate lawyer to look over the contract, if you have a real estate agent they can generally recommend one. Once you sign that contract, that's it so make sure everything is in order before you sign it. If you try to back out anytime after signing that contract, say goodbye to your 20k so make sure you are absolutely sure this is what you want, the contract will outline the penalty for backing out and its usually you forfeit your 20k deposit. Like I said all of these contracts are heavily one-sided towards the builder, since you're new to this process I highly suggest you seek out a professional to help you. I'm not sure how it works with whatever particular builder you're dealing with but generally speaking most of these places have you put down 20k as a "deposit" which is used as your downpayment. You pay 10k then in 6 months or a year depending on their schedule you give them the other 10k and that's that. Any other money that you want to put down you go through the mortgage company. Your mortgage starts the day of the closing date which will be when you assume occupancy. You're not on the hook for a mortgage payment during that 2 year period where you're waiting for the place to be built, the only thing you're on the hook for is your initial deposit. My last piece of advice is be prepared to wait longer than that 2 year building period. Unless this builder has an amazing reputation and proven track record for consistently delivering on time, they'll be late. Might be a few weeks, might be a few months, more often than not it can be a few years late. This is all stuff I learned buying my townhouse, I didn't buy directly from the builder I bought it off the guy who bought it from the builder before they finished construction. It's call an assignment of agreement so basically they transferred their contract from the builder over to me, which in itself was a giant pain in the rear end and would never do it again. Hope that helps a bit.
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Aug 4, 2014 15:40
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| # ¿ May 21, 2024 12:50 |
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Spadoink posted:Thanks - this helps a lot. No problem. I just remembered that when you apply for your mortgage if you're getting any money from your in-laws whoever is financing is going to want to see where that money is coming from. My girlfriends dad gave us money to help out and we had to sign some form saying it was a gift. I went with a mortgage broker so that process might be a little different if you go directly to a bank, im not sure though. I'd recommend going with a mortgage broker because they'll get you the best possible interest rate. Banks were quoting us something like 4-5%, mortgage broker got us 2.79%. Just something to think about.
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Aug 5, 2014 00:28
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