Wednesday, December 4, 2013

Buying a pre-selling condo

You have most likely encountered the term ‘pre-selling’ in relation to real estate investments, usually for condominium developments, at one time or the other. You might see this as an opportunity to pay much less for a worthwhile investment or a risky pitfall you want to get away from. 

Along with these benefits come risks that you should be aware of as a buyer. Delays in the project completion and turnover and part of the risks involved.

Learn the pros and cons of buying a property at pre-selling price before you set your mind either way.

The main benefit of buying a pre-selling condo is the tempting introductory price, which is usually a lot cheaper than the actual price, sometimes going over 30 percent off a finished unit price. Developers may also offer more manageable payment schemes to attract buyers. 

At the pre-selling stage, there are usually a lot of units still available, including much-coveted prime locations such as corner units. You have more options to choose from and more leeway to acquire your preferred location and floor layout. 

Along with these benefits come risks that you should be aware of as a buyer. Delays in the project completion and turnover and part of the risks involved. This might be a result of the company’s insufficient funds or even bankruptcy, so protect yourself by doing a background check on the developer. It is safer to commit to a trusted developer that has a good reputation of turning over quality projects on time. Also, if you’re a buyer with a non-negotiable move-in timeframe, buying a pre-selling condo will not ensure your desired schedule. This is another risk you will have to take.

Another risk is that there might be changes in the floor plan, material specifications and building amenities. Ads and flyers for pre-selling condos usually state that the designs and amenities are subject to change without prior notice. The end result of the project might not exactly suit your expectations. 

There are definite benefits and risks to buying a pre-selling condo, but it all boils down to what suits your budget and needs. - Aislinn Kee


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