Sell Your North Vancouver Home Fast, and for Top Dollar!

Buying a pre-sale condo can feel confusing if you’re new to the process, but it’s actually pretty straightforward once you break it down. In this guide, I’ll cover exactly what a pre-sale is, how the process works, and what to keep in mind as you navigate the market across Vancouver and the Lower Mainland.  

What Is a Pre-Sale?  A pre-sale is when you buy a home, typically a condo or townhouse, before it’s built. Developers sell these homes early to fund construction, and buyers lock in their unit by signing a purchase agreement and paying a deposit.  

Think of it as buying a home in advance. Instead of moving in right away, you’ll wait 1-3 years (sometimes longer) until the building is completed.  

Here is how the Presale Process Works  

1. Do you need a Realtor®? While you can do the process solo, it’s in your best interest (and free to you) to use a realtor that is familiar with pre-sales. There are many nuances to navigate and as friendly as a sales centre may be, legally the sales team has the developer’s best interest at all times.Pre-sale contracts are designed to protect developer interests and it’s important you understand what your rights and responsibilities are. In addition Realtors® can negotiate better terms, deposit structures and upgrades that aren’t always available to the public.
2. Find the Right Project:  Start by looking into new developments across Vancouver and the Lower Mainland, or in your preferred area. These aren’t always easy to find since most aren’t listed on the MLS. Many can be found through word-of-mouth, Realtors® or livabl.com (great resource for pre-sales though not always up to date!). Pay attention to location, amenities, developer reputation, and future growth in the area. 
3. Choose a Unit: Once you’ve chosen a development, you’ll pick a specific unit. This means deciding on size, floor plan, view, and which floor you’d like. Developers typically have floor plans and for larger projects, model suites.
4. Pay the Deposit: Pre-sales require a deposit, usually between 15-25% of the purchase price, paid at once or in installments. For example, you might pay 10% upfront and another 10% over the next year. This schedule is outlined in the purchase agreement.  
5. How the Rescission Period Protects You: The rescission period for pre-sale condos in BC is a seven-day cooling-off period where buyers can cancel their purchase agreement for any reason and get their deposit refunded. It’s designed to give buyers time to review the contract, seek advice, and ensure they’re ready to commit.
6. Wait for Completion: After signing the contract and paying the deposit, you’ll wait while the building is under construction. During this time, you can save more money and prepare financially for when it comes time to close.
7. Assignment: If your situation changes and you’re unable to close many developers will allow you to sell your contract to another buyer, that is called an assignment. There is usually an associated fee of 1-3% which is put into your contract when you originally purchased the presale.
8. Closing and Move-In: When the building is ready, you’ll finalize the purchase by paying the remaining balance (usually with a mortgage) and covering closing costs like legal fees, GST, and property transfer tax. After that, you get the keys to your new home!  

Pros: If you can’t actually see the unit and you have to wait years before moving in, you may be wondering why anyone would ever consider buying a presale. Here are a few common reasons:

• Often, the price will increase while you wait for the unit to be built. If the market rises while the property is being built, your home might be worth more than you paid.
• While waiting for completion you have time to save for a bigger deposit or to get your finances in place.
• You get a brand-New home, from appliances to design. And almost everything is under warranty.
• Some developers let you choose finishes and upgrades to personalize your unit.  

Cons: There are many risks you need to be aware of when buying pre-sales:

• Delays in construction have become increasingly common and timelines can stretch longer than expected.
• While less common, there is always a risk that the value of your home decreases by the time it’s built if the market cools.
• Interest rates can go up or down when it comes time to close. Remember, you’ll need to qualify for a mortgage when the building is complete, so be sure your financial situation will stay stable.
• Don’t let closing costs surprise you. Be prepared for costs like GST, property transfer tax and legal fees when it’s time to take ownership.  

Tips for Beginners  

1. Work With a Realtor: A realtor familiar with pre-sales can guide you to reputable developers and help you choose the best unit for your needs.  

2. Understand the Contract: Pre-sale agreements are detailed. Have a lawyer review the contract to make sure you understand all the terms.  

3. Research the Developer: Check the developer’s history. Have they completed past projects on time and to a high standard?  

4. Budget for Closing Costs: Don’t forget to account for taxes, fees, and any potential upgrades you choose during construction.  

5. Think Long-Term: Pre-sales aren’t ideal for short-term plans. Be ready to wait and consider whether the unit will fit your future lifestyle or investment goals.  

Pre-sales are a great way to secure a home or investment property in Vancouver’s competitive market, but they require planning and patience. They can be a strategy for new buyers to get into the real estate market.

Disclaimer: The information provided in this blog is for general informational purposes only and should not be considered legal, financial, or real estate advice. Always consult with a qualified professional, such as a lawyer or licensed realtor, to address your specific situation and ensure compliance with local laws and regulations.