How To Get A Big Discount On Your Purchase (And Other Savings)
Pre Construction already offers many advantages in comparison to buying a resale condo – some of which is the return you make on your investment while you sleep.
But, there is an insider’s secret of sorts that investors know that allows them to save a lot of money upfront: buy through a licensed real estate agent and take advantage of all of the incentives and negotiated pricing to save tens of thousands on your purchase.
You see, a pre construction specialist – which is a licensed real estate agent who deals primarily in pre construction – is going to have a strong relationship with many developers. And developers almost always release units to real estate agents before opening to the public.
And when things move to the public, prices go up and incentives disappear – meaning you pay more and get less.
And even after units are available to the public, a pre construction specialist will have access to incentives and benefits that will help you save thousands – and help you avoid any risk that can come with a pre construction purchase.
We have a whole article that shows you exactly why you should use a real estate agent in pre construction here.
But the key reasons are:
- Access to incentives and benefits that will save upwards of $40,000 on your purchase
- Access to lower pricing
- Free legal review of the Agreement (with Pre Construction Pros)
- Full access to a pre construction specialist who can help you find top-quality projects, give you investment tips, and help you navigate the whole purchasing process
Be Aware Though: Things Move Fast
With pre construction projects, things move very fast.
While it’s definitely important to think things over and decide on whether a project is right for you (we have a checklist here to help you) and whether you’re ready to pull the trigger on such a large purchase, you also need to balance that with the need to act quickly.
Pre Construction is a first come first serve – the units never last long in the GTA, especially in the prime locations (attractive neighbourhoods, by the water, etc) – so the sooner you decide the better.
We find what helps most clients is to have an idea of the pre construction buying process before even looking at projects. And, using the checklist, having an idea of your must-haves (location, amenities, suite direction, etc) as well as having the deposit ready so you can act quickly when you see something you like.
What are the savings like?
Let’s start with what the average price of a condo is right now (as of 2020) in Toronto. Using the standard normalized dollar per square foot ($/sqft) is the easiest way to compare two different unit prices. Right now in Toronto, the average unit price is at $1380/sqft.
Most pre construction projects with real estate agent pricing are going to come well under that average.
We make sure to outline this for every project we send to our clients, but calculating this value is a good way to see how much of an advantage you’re getting.
Developers use the brokerage model for one big reason: they offload much of the marketing and sales costs, which the agents then pay, and they get a guaranteed network of buyers.
But in order to incentivize agents to advertise to their buyer clients, developers pass off incentives, such as reduction in parking, free upgrades, parking and storage discounts, and more. These incentives are a great way for real estate agents to be able to easily market these units to their networks. Which means that you, the buyer, get a lower price. It’s a win-win.
An Extended Deposit Structure – How Does That Help?
Another typical incentive that you get with real estate agents is an extended deposit structure.
With every pre construction project, rather than paying the 20% deposit upfront, you would pay it over a longer period. Typically at certain stages (for example, you would pay 5% in 30 days, 5% in 60 days, 5% in 120 days, and so on).
With an extended deposit structure, you pay over an even longer period. A typical deposit structure would be:
- Pay $5000 With Your Agreement Of Purchase And Sale
- Pay The Balance To 5% Within 30 Days
- This means you pay 5% of the purchase price minus the $5000 you’ve already paid
- Pay 5% In 270 Days
- Pay 5% In 600 Days
- Pay 5% Upon Occupancy
This gives you a longer time to work out your financing at each stage, taking a lot of stress out of the process and allowing you to plan accordingly.
Get Savings On Your Unit
If you’re interested in a pre construction project already, make sure you buy at a discount – never pay more than what you have to!
That’s where we come in. We keep you up to date on any new projects in the area you’re looking in, and you get preferred pricing and incentives – meaning you always get in at the lowest price (along with other incentives).
Of course though, it’s important to keep in mind that things do move fast! That stage doesn’t last long before the developer moves onto the next stage and raises the prices.
If you are interested in pre construction – you can find our current list of projects, which we break down by area, right here: https://preconstructionpros.ca/projects/
You can also sign up for any area and keep up to date on the latest pre construction projects to hit the market – before they go public!
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