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Buying a condo: new or resale market?

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Buying a resale condo
This is the easiest way to buy a condo. Its advantages are:

You can see what you are buying. You don’t have to imagine what it will look like from a floor plan.


We don’t wait. You can move in as soon as you complete the purchase.
The calculations are much more straightforward. You can get your mortgage pre-approved right away and calculate monthly payments using the current rate.
But there are also some disadvantages:

If the apartment has been occupied for more than two or three years, you may need to set aside money for renovations.
You could find yourself in a cycle of one-upmanship for a good apartment in a sought-after building and have to give up if the then asking price is higher than the limit you had set for yourself. (The selling price requested by the builder before construction of the condos is fixed.)
Purchase before construction
As you can guess, you are buying an unbuilt condo directly from the builder. This option also has advantages:

Since you will be the first owner of the apartment, you can customize some things (like appliances, cabinets, flooring).
Condos not yet built tend to be cheaper due to the risk that the project will be postponed or even cancelled, but this happens less often today, especially in certain highly sought-after areas.
You have more time to save. You pay the builder a series of payments as a down payment. When you take possession of your apartment, the latter generally reaches between 20 and 25% of the purchase price according to the builder’s down payment scale.
But there are also disadvantages in this case:

You are buying based on a floor plan, on which you cannot see the finishes, layout or view from the apartment.
Be prepared to pay housing charges. You will be able to move into your apartment as soon as it is ready, but other parts of the building may still be under construction. Until construction is complete and the condominium association is officially formed, you pay housing charges — you cannot start paying off your mortgage at this point since you are not officially the owner of the property. ‘apartment.
After the purchase, you must pay several fees to the builder, which is confusing.
Unlike a resale, purchasing a new condo is subject to sales taxes. But if you plan to live in that new apartment (rather than rent it), you might qualify for a tax rebate.
Nothing is guaranteed. Building a condo building can take years. There is always the risk that the builder may not be able to sell enough apartments to start construction or that he may not be able to complete construction for some other reason; one way or another, you won’t get your apartment. Sometimes, when the building is finished, the apartment could be slightly different from the builder’s initially proposed.
Those are the two main ways to buy a condo, but a third is buying from someone who purchased an apartment before construction rather than buying from the builder. This is called an “assignment”. Buying on assignment can be very tricky because it can be challenging to determine the deposit amount since it can vary from case to case. You must pay the owner any advances he has already made to the builder plus any profit the seller expects from this assignment. You will need to have a little more money if you are interested in an assignment.

As a general rule, if you buy on assignment after construction starts, you run less risk than buying before construction. Depending on the progress of the work, the same pros and cons of buying a condo before its construction apply, up to a point.

We can see that there are pros and cons to buying a condo before construction or on the resale market. These depend on your preferences, your budget and the level of risk you would be willing to assume. Before making a decision, it would be a good idea to consult a real estate agent or a financial planner to weigh with him the choices available to you.

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