If you’re looking to purchase your first home for the time one of the options you’ll have to consider is whether you want to buy an existing home or a resales home. The demand for homes that are pre-constructed within the GTA has been steadily increasing in almost every town due to the numerous advantages.
When you are considering whether to buy a house that is pre-constructed or not, it is important to be aware of the advantages and disadvantages. This will allow you to make educated decisions about your house purchase. Read on to find out the workings of new homes that are pre-constructed with regard to their advantages and disadvantages.
How to Purchase a pre-construction house
In simple terms, a pre-construction house is a home you purchase prior to the building is finished. It could be a semi-detached or condo detached house, townhouse. A model of the house will provide you with an understanding of what the house will look after its completion.
When you are considering buying pre construction homes Toronto, you must conduct thorough research to determine if the location will be suitable for your family’s needs in future. If you intend to sell the house in the near future? Will the investment return be high or low? Here are a few aspects that can determine your choice.
The types of amenities available within the neighborhood
Future plans for development for the region
The price of the home
The accessibility of and to major cities, such as Toronto
Builder’s reputation and expertise
The same building, on the same street
Floor plan and cost per square foot
Benefits of Pre-Construction Detached Homes
Homes that are pre-constructed for sale are getting more popular in the GTA because of their many advantages. Here are a few advantages of homes built prior to construction in cities such as Brampton or Kleinburg.
1. Customizable House Designs
If you buy a home that is pre-constructed you are able to choose the style of exterior and interior designs that are in line with your style. There is an array of options to think about. There is no need to purchase anything new once the building is completed by the developer.
The things you could alter based on your own preferences include flooring materials, kinds countertops for your kitchen electrical appliances, and the colors of the paint. It’s more affordable to make these improvements prior to construction rather instead of doing them after the development.
2. Low Maintenance Fees
If you buy a pre-construction home it is the first one to reside in the house. You can be sure that all the appliances and other equipment in the new structure are more durable. Therefore, you will not have to have to spend a lot on repairs or maintenance procedures.
3. Brand New House
There is nothing that puts a smile on the face of a homeowner like being the first to move into a built home. You’ll be the first to have all the comforts that come with the house, not the case when you purchase a second-hand or resales home. You may even tour the house prior to finalizing it through the virtual tour!
4. There is enough time to save
The down payment and deposits for homes that are being constructed are extremely flexible. The developer can accept installments in a series of deposits, which gives you time to save up funds for the whole home. The installments should be in line with the terms of deposit with the builder.
5. Guarantees Value
New homes that are being constructed typically have a tremendous price per sq ft, which makes them more lucrative than other investment options. Their value will increase when they’re built. You could sell the property at a higher cost after the home is completed.
6. A bit more expensive
The pre-construction homes have numerous advantages that could assist you in saving thousands of dollars off your house purchase. This gives you the opportunity to talk with the builder and negotiate low costs. The homes that are sold on the market are generally more costly.
7. Less Bidding
The majority of builders inflate the prices of homes for resales in accordance with the market’s performance. If rates rise and you want to bid, you’ll need to perform lots of bidding to secure an affordable price. But, homes that are pre-built have a set cost, making it more affordable to plan for.
Pros and Cons of Pre-Construction Homes that are available for sale
Like all investments home, pre-construction homes come with a few disadvantages that you should be aware of prior to making a decision to invest in these homes. These are the disadvantages of homes that are pre-constructed.
1. Construction Delays
Pre-construction homes typically take between three months to a year to be completed. But, delays are not unavoidable particularly when buying condos that are in construction. Builders could wait for condo units to sell prior to making additional units, which could take longer.
2. Higher Deposits
Pre-construction homes tend to offer flexible deposits, certain developers might require to deposit between 10 and 20 percent prior to you sign an agreement. However, this is distinct from the 5 percent deposit for resales houses.
3. Subject to HST
Contrary to resales houses that are sold pre-construction, sales of pre-construction homes can be subject to the Harmonized Sales Tax (HST) which can increase the price of the house. The benefit is that you are eligible for a rebate on HST for those who live in the pre-construction apartment instead of renting it out or selling it to potential buyers.
4. High Condo Fees
Although pre-construction condominiums are likely to be a bit cheaper as compared to other investment options, the prices are likely to increase over the coming years by 10-20. The reason is that the costs of operating condos tends to increase with the passage of time. It is important to add these future increases to your budget to assess the the affordability.
5. Hidden Fees
If you buy a pre-construction condominium you can pay an additional “occupancy fee” when you register the unit prior to being legally a homeowner of the unit. The fee, however, doesn’t include in mortgage payment. It is also possible to pay more to upgrade your home.
6. Additional Costs
Pre-construction homes because of their cost may not be the best choice for your needs. What happens if you end with a higher cost than you anticipated? The price you receive from your builder might not be the amount you’ll pay on the house that is being constructed. There could be a higher cost for upgrades and taxes.
Final Words
New homes that are being constructed located in Toronto’s Greater Toronto Area have both pros and pros and. It is important to decide if you are able to afford them despite their drawbacks. To ensure you get the best quality from a home that is in pre-construction schedule several meetings with the builder in order to discuss the legal and budgetary aspects of the entire construction.
