Buy Now, Save Now

Karen KesselAdvice, For Buyers

It’s really true. Pre-construction prices are a legitimate savings and a great investment. Builders need to secure sales and the best time to do that is before shovels hit the ground and before building costs start to grow.

Homebuyers, condo buyers in particular, have the first opportunity to get the best selection of locations, plans, layouts and closing dates before a project takes off. Not only does it give buyers the best selection, it offers an investment that starts to grow from the moment a deposit is made.

In the case of condominium construction, most builders need to illustrate the viability of a project to their lenders with a minimum number of sales before financing can be advanced. That’s when incentives are offered to encourage purchasers to buy early.  It can be an appliance package, upgrades, a discounted mortgage rate…. anything to whet a purchaser’s appetite. The earlier purchasers step forward, the earlier construction can begin putting closing dates in sight.

Construction of RiverHouse Condominiums, Downtown Guelph, 2013.
Construction of Downtown Guelph’s RiverHouse Condominiums, 2013.

It’s also a purchaser’s opportunity to choose that lake view or a southerly or western exposure that are always most popular.

Condo selection is an art – corner suites, higher floors, ground floors, closer to the elevator, preferable exposures to scenic surroundings… name it. If a project is released in the fall, and you wait and head south for the winter, chances are the pickings will be considerably slimmer when you return in the spring, and prices will be higher. It’s a fact of life and a fact of building.

Builders offer these new properties at market value prices so as construction begins and costs begin to grow, purchase prices increase to cover growing costs. Once construction begins and other buyers take notice of the project, the interest and demand increases, while supply is limited, and Economics 101 kicks in – so prices rise. Demand rises and you’ve already got your purchase price locked in while the value continues to rise. It’s a win-win situation.

What adds to the winning formula is a 10-day cooling off period. Under the Condominium Act, buyers are entitled to a 10-day rescission (cooling off) period. This allows time to have a solicitor review the offer to purchase, you can discuss financing with the bank and, if need be, change your mind. During those 10 days, the property is taken off the market. Should you decide not to move forward, the contract is cancelled and any deposit is returned according to its terms, and the property is put back on the market.

So the next time you see a preview opening or preview registration, sign up, check it out, have a look. More importantly, if you like what you see, buy now, save now and watch your investment grow. Development like Gordon Square, in Guelph’s South End might be just the opportunity you’re looking for. As they say, knock-knock!