So you are thinking about buying a pre-sale condo in Greater Vancouver?
It's so easy to get seduced by the slick advertising and professional staging of the show suites and then there is the lure of owning a sparkling new place with the newest designs, features and amenities. Then you hear all the tantalizing stories of people making a fortune assigning their contracts before the building is even started. It's no wonder that many people end up buying on the spot on their first trip to the showroom! I have to caution that this is a risky practice! There are definitely lots of benefits to buying a condo pre-sale, but there are also many risks involved, so it's important to have representation in your purchase.
The Sales People are there to well, Sell!
The Sales People at the Developer’s Sales Centre are often not licensed REALTORS®, their job is to sell. Don't get me wrong, these people can be very helpful, but you need to remember that they are employees and they are trained to represent the the Developer's best interest. IF they are licensed Realtors their fidutiary duty is to the Seller, NOT you.
When you have your own designated Buyer's Agent, they are working for YOU and are there to represent your interests in the transaction.
The Developer's Contract is heavily weighted in their favour
The Pre-sale contract is drawn up by the Developer's Lawyers to protect their interests, not yours. They are not using the standard Real Estate Board of Greater Vancouver contract of purchase and sale but instead a custom contract that has all kinds of clauses and terms allowing them to make changes, substitutions or delay completion. Often you cannot change any clauses but its important to fully understand what you are getting into when you sign the pre-sale contract. Your REALTOR® can help you assess the risks vs. the benefits. It's vitally important to remember that the pre-sale contract is legally binding and you cannot get out of it once the 7 day rescission period is over. Your real estate agent can point out areas of concern in the contract and can occasionally negotiate better terms or changes. It is also highly recommended that you get a Lawyer to look over the contract and the Developer's disclosure statement before the end of the rescission period.
Due Diligence on Developer / Builder
Not all Developers and Projects are Created Equal! Your real estate agent has experience dealing with new developments and can investigate which Developers have a good reputation for doing quality work and completing on time. They can also assess similar projects in a neighbourhood and tell you which one offers the greatest value and potential.
Comparative Market Analysis
Developers may increase prices as the market changes. Often the early birds often get the best deals but sometimes the last few units in a completed building are sold at a discount. Your Buyer's Agent will do a comparative market analysis on similar units sold or currently for sale and can tell you if the price being offered for the pre-sale is fair or not.
Assess the Value of Extras / Upgrades and Designers Touches
The Show Suite is often not the same floorplan as the one you are interested in purchasing, or the displays may contain many designer add-ins that are not included or are available at an extra charge. Your REALTOR® can help you determine if these upgrades are worth the money or if hiring a contractor to do them is better value. For example, in The Charleson, the display suite has a beautiful walk-in closet with a dark wood veneer but this is an upgrade that costs $4500, the included standard closet interior is plain white.
Other services your REALTOR® can offer you are:
* Help you review available floor plans to find the best fit for you
* Market analysis of all available options; both presales and resales
* High level negotiating
* Reviews of all documents, contracts, disclosure statements
* Referrals for any service provider you may need; lenders, lawyers, movers, accountants
* Assignment sales in the event you wish to sell before completion (assuming contract allows)
*** Your Agent also has Errors and Omissions insurance
You really should have your own agent representing you in any pre-sale purchase!
I PROVIDE ALL THESE SERVICES AT ABSOLUTELY NO COST TO YOU!
Call 604-346-6801 for more information about Vancouver or Burnaby condo pre-sales, or feel free to ask any real estate question.
Lynn Le Drew
RE/MAX Crest Realty Westside