Commonly Asked Questions
If you're purchasing a pre-construction condo and have some unanswered questions don't worry, you're not alone. Browse the most popular questions and answers asked by first-time and veteran condo buyers alike. If you don't find an answer to your question, feel free to contact us directly.
Is there fee for buying at the Platinum Stage with the Platinum Brokers?
No fee at all, the Developer pays all Agents including the Sales Centre Agents. Our services are always free for Buyers and in addition to our expert advice we are also offering our Exclusive Platinum VIP Broker Incentives.
How do I register for a Platinum Broker Sales Event for a project or future projects?
Simply contact us or fill out the registration form to be added to our mailing list. You will be able to unsubscribe at anytime free of charge and obligations by clicking on the "unsubscribe" link or responding to an email and typing "unsubscribe".
What happens after I register on your website?
You will receive an email confirmation from us confirming that we will be adding your contact details to our VIPCONDOCAPITAL database, keeping you informed as the information becomes available. Once the Developer provides us details such as VIP sales launch date, floor plans, prices, deposit structure, sales brochure, incentives, promotions and a unit allocation worksheet all this information will be sent out to you.
I'm interested in purchasing a unit. What's next?
Reserve immediately, as units allocation are on a first come, first serve basis with worksheets being submitted on a deadline set by the Developer. Studios, 1 bedroom, and 1 bedroom + den selections get reserved fairly quickly. Once you get the information package we suggest to look over the floor plans, select your units, usually we recommend to pick 3 unit models you are interested the most. Fill out the Unit Reservation Form with your number one choice, along with 2 other choices, upload a copy of your government issued ID as it is requires for submission to the Developer in order to reserve a selection of your choice. No cheque or money is necessary at this point as you're only reserving a unit. Once your unit selection is confirmed and reserved, you will be contacted by us to schedule an appointment to come into the Sales Centre Office to sign the Agreement of Purchase and Sale with the Developer. At this time you will be required to bring along with you an original Photo ID (Driver's License, passport), SIN Card (required by the Developer for deposit interest) and a cheque book (minimum 6 cheques that will be post dated when signing). Cheques are payable to the developer's lawyer, "in trust".
What happens after I sign the Purchase of Agreement and Sale with the Developer?
Once the contract has been signed with the Developer, you have time that is called the "10 Days Cooling Off Period" during which you will be getting your Mortgage Pre-approval letter, having your Lawyer review the contract and such. If you change your mind during these 10 days for whatever reason you have the right to cancel the contract with no questions asked, pay no penalties and your deposit cheques (post dated) are returned back to you. After the 10 days, the contract is firm and you just bought yourself a new condo.
Why should I buy a pre-construction condo and not a resale condo?
Think about how nice it is to own something new. A lot of people prefer to buy brand-new, whether it’s a new car, a new
phone, or a new home. People are attracted to the latest, most modern things in life. Think about how nice it would be to
own a condominium suite that nobody has lived in yet, and use amenities that are freshly-installed.
Another reason is that the purchase price of a pre-construction unit is often cheaper. Additionally, appreciation is higher and more rapid because the structure has just been built, compared to a resale unit which has already appreciated somewhat.
You will also be the first person to occupy the space; the first person to use the new, state-of-the-art appliances, the first person to enjoy the view from your balcony, the first person to relax in your new soaker tub. For many residents, one of the best parts is customizing your own finishes and upgrades, which can only be done in the pre-construction phase.
Why do I need a Real Estate Agent when I can go straight to the Builder?
Buying real estate is one of the largest purchases you might ever make, so we don't need to tell you that it’s not something
to take lightly. As platinum brokers, we protect your interests by representing you, not the developers.
Keep in mind that the on-site sales team works directly for the developer, so they're interested in selling their project and their project only.
We, on the other hand, are here to support you. We'll guide you through the complicated process and make sure there are no surprises. Because we specialize in pre-construction, we can educate you about the developer, the site plan, different layouts, market trends, and the lease process if you’re an investor. We can also show you other options in the area, something the developer's sales team likely won't do.
One of the biggest perks is that we have access to these projects before they're released to the public, giving you first choice of suites at the lowest price. By the time the developer is selling to the public, many of the units will likely be sold and the remaining inventory will have increased in price.
Another advantage is that using a platinum broker doesn't cost you anything, as we get paid a commission by the seller, not the buyer.
Where is the best place to buy a condo to make the most on my return?
There is no cookie-cutter answer to this question. Why? Because every buyer, neighbourhood and time frame is different.
It boils down to a few main factors: your intentions, price range and lifestyle. You might want to call your new condo home, or you might want to lease it out and use it as an income property, and those can have very different outcomes.
- Intention: If you're an investor, we will provide you with market research and statistics to help maximize your return on investment. If you intend to live in your new unit, we'll get to know you and find you a home that fits your lifestyle now, yet provides long-term value.
- Affordability: We can provide you with several options with your budget. Pre-construction condos usually require a
down payment equal to 20 percent of the purchase price, although the deposit structure allows you to stagger your payments
over the pre-construction period.
Whether you're living in your space or leasing it out, you may qualify for HST rebates.
- Lifestyle: We have access to a wealth of projects at the platinum stage, which allows you to shop and compare options. Once we get to know you, we can narrow down choices based on your wants and needs. Do you prefer sleek high-rises or cozy boutique buildings? Waterfront views or city skyline view? Would you prefer a ravine in your backyard or the city's hottest restaurants?
What type of units are most popular for investment?
It's hard to go wrong with one-bedroom-plus-den and two-bedroom units, as they tend to attract more professionals and young families. Studios generate great rental income and are often popular with students, but may take somewhat longer to sell in the current market.
Should I buy parking with my unit?
Parking spaces in the downtown core can range from $40,000 to $80,000 for one spot. Can you see yourself living here in the
next 5-10 years and is a car a necessity? If the answer is yes, then you should consider buying one. Just like the appreciation
of a unit, you will likely be able to sell your parking space for a higher price eventually.
If you are strictly an investor and you are buying a one-bedroom unit in an area with an excellent walk score, save your money and pass on a parking space. For a slot that costs $50,000, it will take you approximately 20 years to pay it off if you rent it out for $200 per month. If, however, you're buying a two-bedroom or three-bedroom and anticipate renting to a family, or if you buy in a neighbourhood where having a car makes commuting easier, it might be something to consider.
Which exposure is the best for resale?
Often, south-facing views make a great option for resale, provided they’re not obstructed. Anywhere you can see the waterfront, the CN Tower or the downtown skyline will be extremely popular with buyers. If you are choosing to live in your new home, ask yourself: do you like morning sun? Consider an east exposure. For those who like afternoon sun, consider a west-facing unit.
Can I own multiple properties in the same building?
Yes! You can definitely own multiple properties in one building, although the government will ask you to designate one as
your primary residence. Any additional properties are considered an investment and may be subjected to HST at final closing.
If you're purchasing a property for an immediate relative to use as their primary residence, you may qualify for an HST rebate.
If it’s an investment property, we can assist you with applying for rebates as well.
What should I do if I’m not 100% sure about buying this last unit today?
Buy it!!!! Remember, you have a 10-day “cooling off period” to think it over and if you change your mind during this period,
you don't face any financial penalties. But you know Murphy's Law: the moment you like something, there are two more people
wanting the same thing.
If you are 90% sure and it's the last model available, consider buying and take advantage of those ten days to evaluate your choice. We've been in so many situations where our clients weren't sure and hesitated. The next day they came in and said they wanted to buy it, but the suite was already sold. The cooling off period is there for you, use it to your advantage.
What is a "Cooling Period"?
The cooling off period is a time frame where the unit is reserved for you, but allows you the time and space to make a final
decision. After signing the Agreement of Purchase and Sale for your unit, you have 10 calendar days to do your due diligence.
During this time, we suggest you review the contract with a pre-construction lawyer, speak to your financial institution and
get your mortgage pre-approval in place and ultimately, decide if you want to buy the suite.
If, during the 10 days you decide you no longer wish to buy the unit, you can simply cancel the contract by going back to the sales centre, returning all the documents and signing the Rescission Letter.
If you decide to go ahead with the purchase, congratulations! You’ve bought yourself a brand-new condo. This means that the contract is binding and your first cheque is cashed on the 11th day.
What happens to my deposits if I change my mind?
If you're still in the 10-day cooling off period and you decide not to go ahead with the purchase, the builder's office will return your deposits in full prior to the end of the 10 days.
I bought my unit 15 days ago, but my first deposit cheque hasn't been cashed. Why?
This is very common in newly-launched developments. The first cheque is usually cashed 10 days after signing the contract, but sometimes, if it's a busy release and the developer has sold a lot of suites in a short amount of time, your file will take longer to process and your cheque may take longer to cash. This isn't uncommon, so rest assured, your file will be processed as soon as possible.
What else should I know about payments?
Avoid not-sufficient-fund (NSF) fees! This is easily forgotten by many buyers.
One thing we advise our clients to do is to set reminders on your calendar for the post-dated cheque withdrawal dates. It's very easy to forget and if you neglect to have the amount in your account, you will get charged a NSF fee, which could be anywhere from $250 to $750. Understandably, this is not fun, especially if you aren't expecting it. Plan ahead!
Do I need a Lawyer?
Yes. You will need a lawyer to review your purchase agreement during the cooling off period, at the interim occupancy stage and at final closing. When you buy pre-construction, you will sign a lot of documents and it’s helpful to have a lawyer who specializes in these kind of purchases helping you navigate these documents. Please make sure your lawyer has experience with pre-construction purchases, as it's a different process than a traditional resale. A good legal representative will look out for your interests help you understand all your rights and responsibilities.
How much will a pre-construction lawyer charge me?
The lawyers we work with charge an all-inclusive fee of $2,003.00 plus HST, which totals $2,263.00. If you decide not to go
forward with the transaction following their review of the agreement, then a cost of $300 plus HST will apply.
Please note that if there are any special considerations (i.e., out-of-town signing, rush closing, additional mortgages, tenancy assumption, extension requests, etc.), additional costs will apply.
What happens if I cannot close on the property, or decide not to?
We understand that things could change in the next few years. Usually builders will permit something called an "assignment"
or "assignment sale." This allows you to sell your contract prior to the final closing. As your broker, we always ensure this
clause is written into your purchase agreement, but be sure to read the contract carefully as there may be some rules
surrounding it. Some developers will charge an assignment fee (ranging from $1,000 to $6,000) and some will waive this fee.
As long as the building has a certain number of units already sold (in most cases 75% or more) the builder usually allows this kind of sale.
What is an Interim Occupancy fee?
During the "Interim Occupancy phase", it is safe and legal to live in your suite, but the building is still awaiting full
completion and can’t be registered. This means you can live there (or rent it out), but you don't have ownership title and
you can't yet register a mortgage.
This period could last anywhere from a few months to two years. During this timeframe, you will be paying a form of rent, also called "occupancy fees" to the developer. This is usually paid monthly and consists of interest on the unpaid balance of the unit's purchase price, an estimate of property taxes and maintenance fees.
What should I expect at closing?
There are additional costs at closing, along with some specialized paperwork. Aside from the the down payment you give to the developer, be prepared to set aside four or five percent of the final purchase price for final closing costs. We'll guide you through this process so it seems less overwhelming.
Will the condo fees go up every year?
The amount you pay in maintenance fees is based on the interior space of your suite only. That calculation doesn't include your balcony or terrace.
The maintenance fee that is stated on the sales agreement is usually what you will pay for the first year.There is a condominium reserve fund that is in place for every building and it's up to your condo board to manage these funds and decide how they will be used. You can assist by joining the board and having input on these decisions.
During the first few years, there's not much to maintain, as the building is new. These days, in newer buildings, the maintenance fees often don't include Hydro, water or heating and cooling, which means you have control over your consumption. This could result in your fees staying lower, although keep in mind that it’s likely for fees to increase approximately three to five per cent a year to cover inflation.
Can I use my RRSP for my down payment?
One great source of funding for the down payment on your condo is your Registered Retirement Savings Plan (RRSP). The Canadian government's Home Buyers' Plan (HBP) allows you to borrow up to $25,000 from your RRSP tax-free for a down payment. However, this is only an option for first-time homebuyers and, since the HBP is considered a loan, it must be repaid to your RRSP within 15 years.
Do land transfer tax credits for first-time buyers apply?
If the condo you are purchasing is the first home you have purchased, meaning you have not purchased another home prior to purchasing your condo, then you are entitled to land transfer tax credits.
Is a home inspection necessary when purchasing a new condo?
When you buy a brand new condo, your builder will give you pre-delivery inspection (PDI). The PDI will include a walkthrough of your unit with a representative from the builder's company, giving you the opportunity to record any damaged, missing or incomplete features that you see. Even after a PDI, though, you may still want to consider getting a home inspection done on your new condo.
Do I need a real estate agent specializing in pre-construction?
Buying a pre-construction condo is vastly different from buying a resale condo. Specialized agents know exactly what to look for and will have your best interest in mind. They can also help you negotiate a better deal on the deposit structure, closing costs and unit upgrades. Another benefit is that specialized agents will often be given VIP access to units, allowing you as a buyer to see it first, which is especially important in a competitive market like Toronto.
When purchase in pre-construction, what interest rate do I pay on my mortgage?
Good question. Most lenders only offer a rate hold on their pre-approvals for 30-120 days; this would be sufficient if your unit would
become ready for you to take ownership during that time. However, if your unit won't be ready for a few more months or even years, the
mortgage rate you are quoted for your pre-approval will not be the rate you get when your mortgage actually starts.
With that being said, most pre-construction condo buildings will have representatives from one or two of the major banks who offer specialized mortgage products that include capped rates. The mortgage rate they offer will likely be higher than what is available today, but could be lower than what is available to other buyers when you finally take ownership. With a capped rate, you are guaranteed to pay the lesser of the capped rate and the current mortgage rate available at the time your mortgage starts.