Buying a home is an exciting time in your life, but it’s also a significant investment that requires careful consideration and planning. When it comes to purchasing a property, there are typically two main options: buying a pre-sale home or purchasing an already-built home. Both have their pros and cons. In this article we wanted to highlight some important factors to consider when purchasing a pre-sale home.
A pre-sale home is a property that is sold before it is built, or while it is still under construction. When you purchase a pre-sale home, you are essentially buying the right to own the property once it is completed. This means that you typically will have to wait for a certain amount of time before you can take possession and move in. However, there are several advantages to buying a pre-sale home that can make the wait worthwhile.
- Lower Prices
One of the main advantages is that it is usually priced lower than buying an already-built home. Builders often offer pre-sale homes at a lower price to entice buyers and secure funding for the construction process. In addition, pre-sale homes usually come with more flexible payment options, such as a lower deposit followed by instalments, which can help make the purchase more affordable.
Anther advantage is that you normally have the opportunity to make some customized choices. When you purchase an already-built home, you have to work with what is already there. However, with a pre-sale home, you can often select things like your colour scheme, finishes, and even design elements, or certain upgrades. This level of customization allows you to create a home that truly reflects your style and personality.
- Energy Efficiency
Pre-sale homes are typically built with the latest and greatest energy-efficient technologies and materials. This means that they are designed to be more energy-efficient than older homes, which can result in significant savings on utility bills. Energy-efficient features can include things like high-efficiency HVAC systems, insulated windows, and energy-efficient appliances. These features not only save you money but also help reduce your carbon footprint and make your home more comfortable.
- Better Warranty
When you buy a pre-sale home in British Columbia, you will normally get a warranty that covers certain defects or problems that may arise in the first few years of ownership. This is not usually the case with already-built homes, where you are often responsible for any repairs or maintenance. The warranty provided with a pre-sale home can give you peace of mind knowing that most issues will be taken care of without any additional costs.
- Newer Technology
Pre-sale homes often come with the latest technology, including smart home features and home automation systems. This technology can make your life easier and more convenient by allowing you to control various aspects of your home from your smartphone or other mobile devices. For example, you can control your home’s temperature, lighting, and security from anywhere, giving you greater control over your home’s environment and security.
- Appreciation Potential
Pre-sale homes have the potential to appreciate in value before they are even built. This is because the value of the property is based on the market value at the time of purchase, and the market value is likely to increase by the time the property is completed. This means that you can potentially make a profit on your investment before you even move in. In addition, these homes are often located in up-and-coming neighborhoods, which can also contribute to their appreciation potential.
- Lower Maintenance Costs
Because pre-sale homes are brand new, they typically require less maintenance than already-built homes. This is because everything is new, and there is less wear and tear on the home’s components. This can translate to lower maintenance costs, which can be a significant advantage for homeowners looking to save money in the long run.
While there are many advantages to buying a pre-sale home, there are also some potential disadvantages to consider as well:
Pre-sale homes can sometimes be subject to construction delays, which can be frustrating for homeowners who are eager to move in. Delays can be caused by a variety of factors, including weather, labor shortages, or issues with permits and inspections.
- Limited Financing Options
Depending on the expected completion date of the property you are buying, you may have to wait to secure financing until your Bank can provide a pre-approval and rate hold which is typically a maximum of 18 months before completion. There are, however, some banks and mortgage brokers that are quite familiar with the pre-sale process and have put programs in place specifically for those wanting to purchase a pre-sale home. As a best practice, we always recommend speaking with your mortgage broker before making any real estate decisions in regard to financing.
- Lack of Immediate Occupancy
When you buy a pre-sale home, you will typically have to wait until occupancy is received to move-in. This can be a disadvantage for homeowners who need to move-in immediately.
It’s important to carefully weigh these factors and do your research before deciding to purchase a pre-sale home. Our team of trusted advisors is always here to help answer any questions and help make this home-buying journey as seamless as possible.
If you are considering purchasing a pre-sale home, here are some strategies to consider:
- Do Your Research
Before purchasing a pre-sale home, do your research on the builder, the development, and the area. Look up reviews and testimonials from previous buyers and check the builder’s track record for delivering on time and on budget. Research the area to ensure that it is a desirable location and that there are no major changes planned that could negatively impact your home’s value.
- Work with a Realtor
We recommend working with a Realtor, who is your trusted advisor during this real estate journey. They can help you navigate the process, provide valuable advice, and ensure that your interests are protected.
- Get Everything in Writing
Make sure that all promises, features, and timelines are clearly stated in writing in the purchase agreement. Additionally, make sure that the contract includes a clear contingency plan in case of delays or unforeseen issues.
- Work with a Lawyer
Consider working with a lawyer who specializes in real estate law to review the purchase agreement and ensure that your interests are protected.
By taking these steps we believe you will be able to make informed decisions to guide your real estate journey and ensure a successful pre-sale purchase. Our team at Hardy Project Marketing Group is here to support you, with over 20 years of real estate experience in the Fraser Valley and GVRD. Please don’t hesitate to reach out if you have any questions.