If you’re in the market for a condominium, it can be difficult to decide between pre-construction and resale condos. On one hand, buying pre-construction gives you the opportunity to own something brand new and customisable; on the other hand, there’s no waiting period when purchasing an existing condo.
Both options have their advantages and disadvantages that should be weighed carefully before making a decision. In this article we will explore what exactly these two types of condos are, as well as their pros and cons so that you can make an informed decision about which option is best for your needs.
Resale Condos vs. Pre Construction Condos
When it comes to buying a condo, there are two main options to choose from: pre-construction and resale condos. Each option has its own unique advantages and disadvantages that should be considered before making a decision. By understanding the differences between these two types of condos, you can make an informed choice on which is best for your needs.
Advantages of Buying Resale Condos
No Surprises: You get what you get
When purchasing a resale condo, one of the major advantages is that there are no surprises. Since the unit has been previously owned, you’ll have a better understanding of what to expect in terms of space and amenities. You can get a sense of what it looks like and how it functions without having to wait for your condo to be built and may even have the opportunity to visit the unit prior to making your purchase.
Better Timelines: Low waiting period
When purchasing a resale condo, one of the major advantages is its shorter timeline. Unlike pre-construction condos which involve waiting for the building to be completed, buying a resale condo allows you to own your home much faster. With no lengthy timeline in place, you can move into your new home with minimal delays and begin enjoying the space right away.
Market Valued
If you want to get more value for your money, opting for resale condos might be the way to go. Unlike pre-construction units, resale real estate is priced according to current market values. So, while prices for resale condos in Toronto may seem steep initially, in the long run, they could end up being the smarter investment choice.
Disadvantages of Buying Resale
Features Are Fixed
When you opt for a resale condo, you run the risk of inheriting design quirks that don’t align with your tastes. You might be greeted with an eyesore of a countertop or an unnavigable floor-plan. Sure, you may be able to tolerate it for a while, but if this condo is meant to be your forever-home, you’ll probably want to make some renovations. Prioritizing this preparatory expense before purchasing your resale condo could save you some headaches in the long-run.
The Options May Be Limited
You can find many resale condos in Toronto’s real estate market, but it might be a challenge to discover a unit in the exact building or neighbourhood you love. Usually, only a small number of resale condos are available, which means you might have a hard time finding the one that matches your dreams.
Bidding Wars: Lots of potential buyers
Resale condos are a hot commodity, so get ready to step up your game. Finding the perfect condo in a prime building nestled in the heart of Toronto can take some effort, but it’s worth it. Just remember, with limited supply comes a spike in demand, which means you may need to outmaneuver some competition.
Benefits of Pre-Construction Condos
Customizable
Buying a brand-new, pre-construction condo presents a unique opportunity to build your dream home. This type of purchase allows you to choose all the finishing touches, including cabinet handles and door frames, while also having the option to pick the perfect floor and layout to meet your needs. You won’t find this level of customization buying in the resale market.
Locked Pricing
When it comes to buying a home, many new homeowners tend to prefer pre-construction because it’s often cheaper than buying a already-built home. Not only is the price locked-in, but most pre-construction purchases offer stretched-out deposit structures, giving you the time and flexibility you need to pay for your new abode. That means you can say goodbye to bidding wars and worries about having enough cash upfront. Plus, some pre-construction buyers can get up to a year to cover the deposit.
All in all, pre-construction living is a unique, cost-effective way to make your new home your own.
Home Warranty
Once you’ve acquired a pre-construction condo, you’ll be required to obtain Tarion warranty. This coverage guarantees that should anything fail or malfunction once you’re settled in, you’ll be reimbursed.
Downsides of Pre-Construction Real Estate
Long Timeline
Pre-construction condos offer a unique investment opportunity as they are not like resale condos. While the move-in timeline is not set in stone, these condos are purchased for equity gains instead of quick flipping, making it a long-term investment.
To add insult to injury, before even laying a foundation, a presale is required, with a set number of units needing to be sold. Unfortunately, the construction process is often plagued with delays, even after a completion date is announced. To further complicate things, builders can legally delay completion up to an additional year and a half beyond the promised date before refunding your deposit.
Therefore, to reap their rewards, you must be prepared for a waiting period that can last several years.
Interim Fees
Upon the completion of your specific condo unit, you’ll be able to legally move into the building, albeit other areas of the condo may still be under construction. However, you’ll be expected to settle an Interim Occupancy Fee at this stage. Although this fee may resemble the cost of your future condo mortgage, it serves a different purpose entirely. Instead of going towards your mortgage, it goes directly to the builder until the official closing date of the condo.
Exclusive Availability
Insider relationships can make a significant difference in the real estate market. Pre-construction buildings offer a wider selection of units than resale, but the catch is that the best ones are often gone by the time the public can buy them. This is due to top agents leveraging their relationships with developers to offer their clients first dibs and leaving the rest for the general public.
In Conclusion
When it comes to buying a condo, the decision between pre-construction and resale units can be hard. Although there are some advantages of purchasing a pre-construction unit such as customizable features, locked pricing, and home warranty coverage; there is also the need for patience with long timelines and interim fees. Additionally, exclusive availability may put you at a disadvantage if you don’t have an insider relationship with developers or top agents. Ultimately, both options present unique opportunities depending on your needs – so consider all factors before making your purchase!