Buying property off the plan (new development/ pre-build) is different in many ways than buying an established property. There are the obvious differences such as the absence of a physical space to inspect, the longer wait time between offer acceptance and completion date, and the options and upgrades involved with the initial purchase. Here at Move to Squamish we help buyers navigate the residential property market to find the perfect home or investment property. Here we breakdown the process of everything you need to know about buying a new development.
If you are seriously considering buying off the plan, having your mortgage pre-approvals in place should be top priority. Many mortgage brokers work with lenders on longer term pre-approvals for financing of new developments- be sure to inquire. Your Buyer’s Agent can recommend a list of local brokers if you don’t yet have a relationship with one. In competitive real estate markets, only qualified buyers will be considered and it’s important to understand what you can afford before getting into a transaction. Once you have decided which development(s) you are interested in, the next step is to review the site plan and floorplans and decide which units are of interest. In a hot market it’s best to have your top three choices, as its likely you may miss out on your first pick. With your pre-approvals in place and your desired selection of units, you are ready for the next step.
Writing an Offer
Writing an offer on a new development differs slightly between developers. In some cases, buyers may be able to view the property disclosure statement first, and others this will be made available after an offer has been accepted. In most cases, only full price offers will be considered. Writing an offer is done on the developer’s own form, not the standard Contract of Purchase and Sale. Finally, a deposit of usually 5% is required on acceptance with a further 5% being required within 30 days or after subject removal.
Terms and Conditions
Within the offer there is a small space where buyer’s clauses can be inserted. It is helpful to work with a Buyer’s Agent to ensure clauses are included in the contract to benefit and protect you. In most cases a subject to sale of existing property clause is not accepted. This is due to the extended time period from contract acceptance to completion whereby there should be adequate time to sell existing property. There is a rescission period after the contract is formed where the buyer can rescind the offer if they find the disclosure statement to be unsatisfactory- this is usually one week.
Completion and Move In
The time period from contract signing to move in can be anywhere from six months to two years depending on the development. It is often good to add on a few months from the initial projected completion date as it’s common for developments to take longer than expected. About a month or so before move in date buyers will have the chance to walk through their new property and make a deficiency list of faults that need to be corrected. Working with a Buyer’s Agent will provide protection to the buyer who otherwise may not be aware of certain deficiencies. Finally, the long awaited completion date. This is the date when mortgages are finalized and conveyancing transfers title from the developer to the buyer. It’s important to note completion date isn’t the same as move in day, usually buyers can move in a day or two after final completion.
Working with a Buyer’s Agent
Buyer’s agents work without a fee or charge to buyers and represent buyers during a real estate transaction. This service involves assisting the buyers in finding the right property, navigating disclosure statements and contracts, connecting with professional services, and ensuring the process runs as smoothly as possible until after completion and move in day. Move to Squamish helps buyers interested in Squamish property navigate the residential property market. If you would like professional advice and support throughout the process of buying a new development at no charge to you, contact Move to Squamish today.