Pre-sales: Are they a good idea?
You may have noticed many adverts in Vancouver newspapers regarding pre-sales. And you may have also been wondering what it’s about. The fun part about these real estate properties is that they don’t exist yet. The buyer is purchasing the right to a completed property that is expected to built in the future.
Now, you may be wondering if it’s safe to buy into a pre-sale. What if the building doesn’t turn out the way that was promised? What if the building doesn’t meet regulations? There are so many variables to consider and so many things that could go wrong. In the end, you have to wonder if it’s worth investing in a pre-sale at all.
The good news is that pre-sales in Vancouver must be regulated by the Real Estate Development Marketing Act. They are generally safe when you buy from a reputable developer.
Is it a good idea to buy a pre-sale?
What you should know about pre-sales
The buyer can kill the deal at any time
First, under the BC provincial law, the purchaser of a pre-sale has the right to cancel the contract to purchase within seven days of the deal. This is known as the “7 day rescission period.”
Lawyers hold the money, not the developers
Until the building is made, the developer cannot touch a single penny of the money that you pay. The money is kept with the lawyer and not the developer. If the project goes under, the money is returned to the purchaser.
Everything you get is in the disclosure statement
The disclosure statement has all the essential information you need to know about your property. The size, amenities and anything that may be inside or included with the apartment.
The pros of buying a pre-sale
There are a lot of reasons to buy into a pre-sale.
You get a beautiful new building
There’s something nice about being the first person to step foot in a newly constructed home. There’s something to be said about living in a newly mint-conditioned home. You’ll be able to create the home you want from scratch without having to change from someone else’s style.
Potential for profit
As the housing markets rise throughout the construction period, the value of your unfinished property also rises.
Great warranty protection
All new homes come with 2, 5, or 10 year warranties.
The cons of buying pre-sale
A declining market
If the tables turn on you and the market declines, then so too will the value of your property.
You would hope that your property would be ready by a certain time to move in. However, there could be many unforeseen delays. Anything could happen that could push back the construction of the building.