Buying a Preconstruction New Build Condo

Buying a home directly from the manufacturer is a popular option among Canadians. In Ontario alone, over 52,000 people purchased pre-construction homes. There is a lot of appeal in buying a pre-construction home, with the greatest attraction being the ability to design it into your dream home before it's built. Condos are popular among pre-construction buyers because they are inexpensive compared to full houses or townhomes, and there is no yard work involved in owning one. If you're considering buying a pre-construction new build condo, here are the top things you need to know.

Deposit Money

The big difference in purchasing a pre-construction condo and an existing on is how you finance it. Existing condos can be purchased with only 5 percent down. A pre-construction condo requires at least a 20 percent down payment. You can break the payment up into installments, however. This is referred to as a "deposit structure."

The Cooling Off Period

Once you've put down your deposit money, the law allows you a short period of time in which to reconsider purchasing the condo. This is referred to as a cooling off period. The cooling off period also gives you time to make sure your finances are in order to make the purchase, and to have your Agreement of Purchase and Sale reviewed by your real estate attorney. The cooling off period is 10 days in Ontario, but differs in other parts of Canada.

Occupancy Fees

Occupancy fees are unique to pre-construction condos. When you buy a condo that hasn't been built yet, the builder may let you move into your unit before the rest of the building is completed. Because you aren't required to start making your mortgage payments until after the building is completed, the building company may charge you occupancy fees to live there while it continues to work on the building. Occupancy fees are calculated by adding the value of the mortgage to the monthly maintenance fees of the building, then adding that total to the property tax. These fees only exist in Ontario, so occupying a condo before the rest of the building is completed is only possible in this province.