Cover Photo Credit: Sarah Pflug
Eric and I moved into our brand new condo a couple of weeks ago. We bought it as a pre-construction and moved in on the weekend after completion. We waited for about 16 months from signing the contract to taking possession of the unit. I thought I would document our experience so people who are interested in buying new/pre-construction for the first time will know what to expect.
I do want to note that not all developers are the same so researching the developer is crucial for a smooth and on-time experience. This was not our first time buying a pre-construction and this particular experience is definitely more organized than others.
Timeline for Buying a Pre Construction Condo
Mar – Contract Signing & First Deposit Paid
We visited the show home of the development and signed the contract in the same month. The deposit structure varies from project to project but in our case, it was 15% of the purchase price over 3 months. We paid 5% of the purchase price as the 1st out of 3 deposits.
We also signed an addendum for an upgrade to laminate flooring throughout the unit (as opposed to the carpet in the bedrooms).
May – Second Deposit Paid
We paid another 5% of the purchase price as the 2nd out of 3 deposits.
Jun 2018 – Third & Last Deposit Paid
We paid the last 5% of the purchase price as required by the contract. Since our project only required 15% in total, nothing more should be due after this.
I do want to point out that this was not guaranteed as I have heard of developers asking for more due to various reasons. I always suggest getting a lawyer to read the contract before signing to know what the risks are. This service will cost money but when you are making a huge financial commitment, this becomes immaterial.
Sep to Jul – Regular Updates from the Developer
We received Purchaser Update emails every couple of months from the developer throughout this period. This was how we found out that the project was going to complete earlier than scheduled hence we had to make sure our ducks were in order. There were all very crucial updates so I suggest making sure they had the right email address on file.
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Mar – Additional Parking Spot
The developer offered additional side-by-side parking spots for sale. Since our unit only came with 1 unit, we signed another addendum for the purchase of a second spot. The difference between purchasing it now rather than to wait until after completion is the ability to roll it into your mortgage. That means you do not have to pay for the parking spot in full (ranging from $15,000 to as high as $40,000).
May (3 months before anticipated completion) – Shopping For Mortgage & Notary
I started shopping around for the best mortgage rates and also lawyer/notary. Most banks will only be able to hold the rate for you for 90 to 120 days so I did not start any application yet but I did start gathering documents.
Jun (2 months before anticipated completion) – Mortgage Application
I started the mortgage application with the bank and also reached out to the notary office to get my file started. We also let the developer know which notary we were using as they required that on file.
The developer also started scheduling walk-throughs in late May and ours took place this month. The walk-through was about 45-minute long and the developer representative accompanied us and made note of the deficiencies we found. There was nothing major other than some deep scratches on the dryer.
Jul – Formal Completion Notice
We received our Formal Completion Notice from the developer on the last day of July. The most important info was the completion date and key pick up information (usually the day after completion).
Aug – Appointments for Mortgage, Notary & Keys Pick-Up
As soon as we got the notice, I forwarded it over to our bank and our notary office. I made an appointment at the bank to sign some mortgage documents and also an appointment at the notary office. One last appointment we had to schedule was with the developer representative to pick up our key on possession day.
I did not have to prepare much for the bank appointment but for the notary appointment, the most important thing to bring was a bank draft for the remaining down payment net the deposit already paid to the developer.
Depending on how your strata are set up, we were able to book the elevator for move-in online. This allowed us to book our movers at the same time so we were able to move in the same week as taking possession.
Aug – Completion Day
This is the day the money changed hand from the bank and the notary to the developer to “complete the purchase.” I did not have to do anything as we already went in to sign all paperwork at the notary appointment. The title also changed into our name.
Aug – Possession Day
I wasn’t able to leave work early that day so Eric met with the developer representative at the condo by himself. The process took about 25-minute and he got our keys, found out where our parking spots, locker, garbage and recycling area, mailbox were and also made sure our unit key worked. They also left us with pamphlets about internet service, community mailbox, strata company etc.
As mentioned in the beginning, my biggest suggestion is to do thorough research on the developer as experience and reputation make a big difference in how smooth the process will go. Also, I also recommend hiring a lawyer to read your contract before signing it as it could be one of the biggest purchases you will make in your life. We did not have a realtor this time but in hindsight, I should have used one as it would come at no cost to me as a buyer. A good realtor experienced in pre construction condo will be able to guide you through the process and offer insights on developers.