Buying Pre-sale Condos
in Toronto
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In spite of the
recent news about global financial
crises, the prices of condominiums in
some large cities like Toronto, Ontario
continue to rise. In places where they
are not on the rise, prices still remain
high. Developers continue to make plans
to build new condominiums. They
typically offer these condos for sale
before the ground is ever broken to
begin building.
Prior sales of condominiums are called
presales. This is where the developer
agrees to sell condominium in advance of
the building being completed. The
benefits of these agreements are obvious
if you happen to be the developer. You
will have your unit sold well in advance
construction being completed, which will
allow you to avoid being stuck with
vacant units. |
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New condo
construction in
Toronto |
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What are the benefits of buying a
presale condo? Usually, if you plan to
buy a presale you will be able to
negotiate a discount off the price that
will be set once construction is
complete. In other words, you get a
condo for a smaller price than what it
will be worth when you move in. You
don't usually have to put anything more
than earnest money or a deposit down on
these types of contracts. Once you have
a signed contract or a set price, you
may have the option to sell your
assignment to another person at a
profit. That is why presales attract so
many real estate investors.
Buying a condo before it is built allows
you to choose a better location in the
building. If you want the top floor with
a view, buying a presale contract will
usually allow you to get it. As they say
in real estate, location is everything.
That is true even with a condo.
A presale contract usually allows you to
assign it to someone else. Since you
probably got a great price in your
contract, as long as condo values
continued to rise, you could make a
profit by selling your contract to
someone else a higher price. Having net
cash on hand, may be a big comfort in
these troubled financial times.
What are some of the cons about buying a
presale contract? Presales are great as
long as the cost of real estate is going
up. When the market begins to come down,
that is when presales are not a good
option.
As we have seen recently, bad financial
news usually reaches investors and the
media too late. Prices can still be
rising, while banks are facing collapse.
If you have been thinking about buying a
condo and you know the prices are
stagnant or dropping, wait until the
economy improves before you buy. The
last thing you want is an overpriced
home. You'll never be able to sell it if
that happens.
Presales can be a good investment if
done at the right time and at the right
price. However, when the market goes
down, stay out of presale is contracts.
This is just one more reason why it is
always a good idea to hire a real estate
professional to help you with any real
estate contract.
Contact Us Today to Find The Toronto
Condo of Your Dreams!
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