Condowizard allows consumer to browse through all pre-construction developments. We are non-bias Real Estate Agents ® that focus specifically on Pre-Construction developments and working with consumers.
Let’s put it this way; Imagine you are about to sign a 2 year Contract with a new cellular company. Rather than going to directly to Bell/Rogers/Etc, you can go to a Non-Bias shop that shows you the best deals with all providers. We live and Breathe Pre-Construction and tailor your needs to the market. Besides that, there is no other way of explaining why to work with Condowizard besides trying us out and seeing for yourself.
What is Interim Occupancy?
Interim Occupancy is best described as paying monthly fees until the building is registered. These monthly fees do not apply towards your mortgage, nor your principal. This can range anywhere between 3 months to 1 year, every case is different and we’ve seen up to 2 years.
To explain this in the easiest way, we’ll use an example. John purchased a suite on the 5th floor of a 21 story condo. Finally after 3 years of waiting, John moves into his unit and the developer moves everyone in floor by floor. During this time, John does not close on his mortgage until the building is registered. For investors, this can be a positive attribute as it gives you more time to close on the mortgage.
What is an Assignment?
Assignment of a pre-construction unit is the legal transferring of your purchase to another buyer before occupying the building and closing on a mortgage.There are certain questions to ask when looking at assigning your suite.
Did the builder allow for an “ Assignment Clause” in the agreement of purchase and sale?
It is important to understand what your agreement states about assignments. This is why a Lawyer should properly go over and review all the information.
How much is the fee for assigning?
It can range anywhere between $0-$10,000+
Usually the developers charge a one time assignment fee.
Are you allowed to Advertise the listing of your assignment?
Most developers do NOT allow for advertising on MLS or other sorts of online sources such as Kijiji, Craigslist, Etc. This is why it is important to work with someone that has a database of clientele and can bring a buyer directly to your suite. There can be harsh penalties for advertising without builder’s consent.
What are the Tax implications of assignments and profits?
We recommend speaking to a Professional Accountant regarding this topic however things to keep in mind are Income Tax and HST Obligations.
Do you transfer the full obligations of an assignment to the purchaser?
No, even if someone takes over your assignment and for some reason is not able to close the transaction then it automatically comes back to the original purchaser.
Deposit Structures- How do they work?
When purchasing pre-built condos, developers usually require 20-25% Down Payment altogether which is spread over a certain amount of time. Typically, the first 15% gets paid out within the first year and a half then the last 5% upon occupancy.
$5000 upon Signing
Balance to 5% in 30 Days
5% in 90 Days
5% in 180 Days
5% Upon Occupancy
Assume we take a purchase price of $500,000 with the schedule above, your deposits will look like:
$5000 on signing
$20,000 in 30 Days
$25,000 in 90 Days
$25,000 in 180 Days
$25,000 Upon Occupancy
Total of $100,000
Are you able to Lease your suite during Interim Occupancy?
Yes, only if the contract allows you to do so. This is a very important factor, especially as an investor looking to rent out their unit. With us being Platinum Agents at CondoWizard, we fight to make sure your contract allows you to lease during this time.
What is the 10 Day Cooling Period?
The 10 Day Cooling Off Period is made to protects consumers when purchasing Pre-Built. From the day of signing, you have 10 calendar days (Not Business Days) to review the contract with a Lawyer, consult with banks for Mortgage Pre-Approvals and complete your full due diligence on your new purchase. After the 10th calendar day from signing, the deal goes firm and your first deposit cheque is then cashed in. You are also able to revert the transaction and cancel for any reason during this period.
Where do your deposits go?
Most of the times the deposits stay in a Trust Account of the builder’s lawyer. If the deposits are not held in trust, you might not be as protected in the case where the developer defaults on the development. We highly recommend going over this topic with a Lawyer. IF the money for any reason is not being held in Trust which is uncommon today, consult with a Professional Lawyer before firming up a deal.
Is a Mortgage Pre-Approval Required?
Yes, usually the developers ask for mortgage pre-approvals within 10 days of purchasing your suite. This is a very fast process which you can get over the counter at your local bank or by using one of our mortgage advisors. This is required by developers because they need to be assured that the buyer will be able to successfully close on the mortgage upon occupancy.
When does the developer typically start construction?
It really varies but from the day of purchasing, we see developers start construction within 1-2 years. Lets say its 2018 and you purchase something which will be estimated to be completed in 2022, construction would most likely start in 2019/Late2019 and construction will take 2-3 years. Every development is different so make sure to ask one of the Condowizards for more information about this topic.
When does the developer typically start construction?
It really varies but from the day of purchasing, we see developers start construction within 1-2 years. Lets say its 2018 and you purchase something which will be estimated to be completed in 2022, construction would most likely start in 2019/Late 2019 and construction will take 2-3 years. Every development is different so make sure to ask one of the Condowizards for more information about this topic.
What does Condo Wizard provide?
From putting you in touch with the best Pre-Construction Lawyers to some of the most well connected Mortgage Brokers in the city, you can be sure to receive the best of the best from us.
Our priority is to make sure you have a smooth transaction and represent your best interests.
How do you get into the first round of sales?
If you think going to the developer to buy a unit is the best way, think again.
When comes time to selling your house, you hire a Realtor ® just like developers hire Marketing Companies to sell their developments. These marketing companies have a handful of what they call “ Platinum Agents” that have proven themselves and sell volume in their projects for sale. All clients of a Platinum Agent get actual first access into the development. You can rest assure that we will fight to get our clients what they are looking for.
If you have any questions that we didn’t cover here, we would love to hear from you.