Why Should I Use A Real Estate Agent For Pre Construction?
There is an incredible amount of money that can be saved on your pre construction purchase – if you go about it the right way.
In this article, we’re going to dive into exactly what a real estate agent does for you in a pre construction purchase, and how they can save you money and save you from hassle during the purchasing process.
What Is Preferred Access?
Developers give first-rights of purchase to the clients of real estate agents, which we call preferred access.
As an incentive to get real estate agents to promote their project, developers offer a discount on the price and other incentives.
At this stage, having a pre construction specialist real estate agent can bring massive savings upwards of $40,000 or more.
Savings and incentives at this stage can include:
- A discount on the purchase price
- Reduced or free parking and/or storage
- An extended or lower deposit structure
- Money towards decor packages
- Cash back
Why do developers sell through real estate agents?
At this point, you may be wondering why developers go through this real estate agent model, rather than selling the units themselves directly to the public.
The simple fact is, it comes down to money.
Developers can save on their marketing costs, and the costs of having a full-sized sales team, by off-setting these costs to real estate agents.
By offering incentives to agents, and a commission on the deal (similar to a seller offering a commission to a buying agent), developers can easily and quickly increase their reach to potential buyers.
Real estate agents spend on their own marketing costs and outreach, devote time to finding the right clients who see the project as a good fit, and then manage the deal from start to finish.
Instead of having just one sales team, the project’s outreach is now only limited to the number of agents who advertise on it and bring it to their client’s attention. And in a highly competitive market, where there is a lot of interest in pre construction, the result is a lot more potential buyers.
So, developers get:
- A team of commission-only salespeople (who they don’t pay unless a deal gets done – and there are definitely many agents who work hard and don’t find clients for a particular project)
- A reliable source of potential buyers
- Resulting in selling more units in the project
While I don’t have specific numbers for any particular developer or project, you can see why developers favour this model that helps them save on costs and reliably sell their units to people who might otherwise not see the project, but who are otherwise looking to buy a pre construction unit!
Finding The Right Projects
A major way that a real estate agent provides upfront value is finding top-quality projects for you to choose from, taking into account what you want in a project.
Buyers could be looking for very different things, including:
- Unique, smaller buildings
- A unit with a large balcony or terrace
- A project in an area with consistent tenants
- Undervalued areas that will likely increase in price in the coming years
- Well-established areas that have lots of local amenities
A pre construction specialist will have a solid idea of what projects out there would be a good fit based on what you’re looking for – and will be able to get you discounts and other incentives on those projects!
After Signing The Agreement
Another important way a real estate agent – particularly one that specializes in pre construction – will be of major service is navigating the post-process after signing the Agreement of Purchase and Sale.
After signing, you enter a 10 day cooling off period. At this time, it’s important to get everything in order, including:
- Negotiating on the fees, charges, and other pieces of the Agreement with the developer – at this time the Agreement can be amended, and you have a lot more power to do so before that 10 day period ends
- Getting a legal review of the Agreement to make sure everything is in order and you are well protected over the course of construction and completion of the project
- Obtaining financing, or a pre-approval – ideally this would be done prior to signing, however
The good news is, we at Pre Construction Pros overview this entire process, including covering the legal fees for the review of the Agreement of Purchase and Sale.
The benefit of a pre construction specialist is having a lot experience with this process. You are guaranteed to be looked after by a team who knows the ins and outs of a pre construction purchase and can walk you through every step of the way.
A real estate agent who is also a pre construction specialist is incredibly valuable – from finding the right projects, getting incentives and discounts, to making sure you are covered during your cooling-off period and beyond.
All in, a pre construction specialist who knows the ins and outs can easily save you upwards of $40,000 or more on a project, as well as help you navigate this unique market.
If you want to book a time to speak with a pre construction specialist (for free) – you can easily book a time here: https://preconstructionpros.ca/book
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