Fraser Valley Living, Home Buying, Your Next Home
“We used to say if we build it, you will come and buy it. Then we used to say if we can sell it, we can build it. Now we say if you don’t buy it before we build it, you didn’t get it,” – Scott Brown, President, and CEO, Fifth Avenue Real Estate Marketing Ltd.
With the current state of the housing market in the lower mainland, the way we buy homes has shifted. Even without the housing market’s influence, a pre-sale or pre-construction home has many benefits.
Top 5 Reasons to Purchase Your Home Pre-sale
Under provincial regulations, all pre-sale homes come with a 2, 5 or 10-year New Home Warranty. Your new appliances will also likely have a manufacturer’s warranty. As the new owner, you will have minimal cost in terms of maintenance and unforeseen expenses, such as expensive special assessments or levies.
If you are purchasing a home in the pre-sale phase, there are typically a number of options to negotiate such as choice of designer selected colour scheme, finishings and floorplan. In the process of purchasing, you are able to review the different styles of floorplans before your purchase, allowing for you to personalize your new home.
Property Transfer Tax
When buying a resale home you are subject to paying property transfer tax (exemptions apply through programs such as the first time home buyers program). With a pre-sale home, you will also be exempt from paying property transfer tax if the purchase price is under $750,000.
In such a competitive, fast-paced resale market, many home buyers are feeling the pressure to make quick offers with limited or no subjects sometimes in a multiple or competitive offer situation. When buying a pre-sale there is a seven-day right of rescission period. This is a seven-day period from the time of an accepted contract that allows the purchaser to read the disclosure statements and complete their due diligence before committing legally to the purchase.
Time to Save
In many cases with pre-sale your move-in date could be one to two years away. This allows purchasers to potentially save more money to put towards the down payment (on top of the deposit that is being held to completion). This is especially beneficial to those who would be able to go from a CMHC insured high-ratio borrower (down payment of less than 20%) to a low-ratio borrower (down payment of 20% or greater). This can save thousands of dollars in mortgage insurance premiums.
Additionally, the Metro Vancouver housing market continues to increase in value, therefore increasing your equity gain in investment prior to ever making your first mortgage payment.
Keep an eye on the local pre-sale market by following Fifth Avenue Real Estate Marketing, and click here to register for the Fifth Dimension.
Home Buying, Real Estate News, Your Next Home