What You Need to Know About Pre-Construction Housing

By: Brandon Weiss & Mark Adelson

What You Need to Know About Pre-Construction Housing

Tags: Toronto, Real Estate, House Prices, 2021, Update, Investment, Investing, Property, Mortgage, Rates, Preconstruction, Builders

If you have been searching for the perfect home or condo, and haven’t quite found one that you love, one of the options you might wish to consider is pre-construction housing – or purchasing your home before it is built.
 
This can be exciting because you get to pick out the finishes you want, and you can even usually customize some of the specifications of the home so that it’s exactly what you and your family want. With almost one in three homes purchased in Canada being bought directly from the builder, purchasing a pre-built is becoming more popular than ever.  
 
But, as exciting as this is, purchasing a brand-new pre-construction home is not always the right choice for everyone so here’s what you need to know about pre-construction housing in the GTA.
 
Minimal down payment
 
When you purchase an existing home, your mortgage broker will tell you how much of a down payment you need upfront. When it comes to purchasing a pre-construction home, you may be able to make that purchase with less of a down payment than you would traditionally need.
 
Time to find financing
 
Since your home isn’t built yet, you have time to improve your financial situation if it isn’t great right now. You need to have the financing when the home is finished being built – which could be 6 months or more away. So, you have the time to buy now and work on your financing while the build is happening.
 
Customization
 
When you buy an existing home, you may be stuck with a certain structure or layout unless you plan to do some major renovations. When you purchase a home pre-construction you can make your home be exactly what you want it to be. From specific finishes and colours to changing the layout you can customize this home to be what you need it to be.
 
Less Maintenance
 
With older homes, things start to wear down and break so you may need to replace major items within the first few years of living in your home. When it comes to new homes, though, everything is new with the latest technology installed so you (hopefully) won’t have to make any major repairs for a number of years.
 
More expensive
 
While you may be able to purchase a pre-construction home with less of a down payment, the home itself could be more money than an existing home – even up to 20% more than an older home. Additionally, the gorgeous finishes that you might see in a model home can really come at a premium and add a lot to the bottom line. Upgrades on a new build are marked up a significant amount as this is one of the ways the builder ensures they turn a profit.
 
Less character
 
Have you ever driven through a newly developed subdivision and thought that all these houses look the same?  This is one of the ways that builders save money - in that they have very few variations on the same house. This may not be an issue for you right now, especially if you prefer the look and design of these specific houses, but when it comes to selling your home, potential home buyers may find that new builds lack the character of older homes.
 
Another consideration is that newly built homes are often not found in mature subdivisions so you may be living in a construction zone for a while as other families move in and you might be farther away from schools and shopping as these amenities may not have moved here yet.
 
Contact Mark Adelson or Brandon Weiss today!
 
Now that you know some of the pros and cons about pre-construction housing, it should be a little easier to decide if this is the right choice for you. But regardless of whether you are looking to be first in line to own a home in a brand-new subdivision or you prefer an existing home, we can help. Call us today to get started on finding the perfect home for you and your family.