What is a Worksheet?

A worksheet is a confidential document that contains your personal information and suite preferences. You submit this document to your agent along with a government-issued ID to request a unit. It doesn’t mean you’re buying a unit quite yet, it just means that you’re interested in purchasing a condo and would like one to be allocated to you. Your worksheet will be submitted and time-stamped accordingly.

What is a Pre-Construction Property?

Pre-construction condo units are reserved while the building is being developed. Once construction is completed, ownership is transferred to the home buyer.

What Happens if I Receive an Allocation?

The very first thing is to make sure you have your bank get your bank draft ready the price varies from $5000.00 + along with getting your post-dated cheques ready.

How do Pre-Construction Condo Down Payments Work?

Down payments for pre-construction condos are not one-time lump sum payments like a regular mortgage down payment. Pre-construction down payments are usually split into 4 equal payments of 5% of the unit price with a $5,000 deposit at signing. Most projects will follow this general guideline, but it is entirely up to the developer.

When does the 10 Day Cooling Period Start?

At the beginning of the 10 Day Cooling Period, purchaser will sign the agreement to purchase and sale with the developer. 

Once the documents are signed and completed, administration introduces the client to the mortgage broker and lawyer to review the agreement of purchase and sale. Once we receive the review from the lawyer and the mortgage pre-approval letter we then send the closing document such as the working with a realtor and buyer representation agreement and fintrac form.

What Happens if We Don’t Receive Our Desired Allocation

If we you do not receive your desired allocation, we would go back to the drawing board to find a property that best suits your needs and desires. Depending on your urgency we will then take into consideration the options available from the listing if applicable.

How Does the Financing Process Work?

Ten days after signing the agreement, you will have to pay an initial down deposit to secure your unit. This initial deposit is part of your total down payment and is usually 5% of the condo unit price. You will also need to get pre-approved for a mortgage loan. Banks will only guarantee the mortgage principal amount, so you will have to wait until about 3 months before the closing date before you can lock in a mortgage rate.

Can I Customize a Pre-Construction Condo Unit?

Approximately one year before construction is completed, you can customize your unit for an added cost. You can adjust your unit’s finishes and colour schemes, but you can make structural changes as well. This includes flooring, window blinds, cabinets, appliances, countertops, and lighting. You can even go as far as to remove a wall if your builder allows it. While these upgrades will cost you more than regular renovations, they provide the flexibility to add value as you see fit.

Will My Unit be the Same as the Floor Plan?

During construction, developers will often make changes to your unit that stray from the original floor plan without notice. For example, they could add support pillars, shafts, or layout changes that affect your unit size and shape. The extent to which developers can change your unit is highlighted in your purchase agreement. Ask your lawyer to explain what changes could be made as the terms used in your contract may be loosely defined.

Can I Cancel My Purchase Agreement?

Within the first 10 days, you can cancel your purchase agreement without penalty during the “cooling-off period”. By providing written notice of your intent to cancel your Purchase Agreement, your builder or lawyer will cancel it. Unfortunately, after these 10 days you may face serious consequences for canceling your purchase agreement. It is a legally binding contract and not adhering to it could cost you your deposit and you could even be sued by the developer.

What are Pre-Construction Incentives?

To encourage buyers to purchase their pre-construction units, developers and brokers may offer incentives to buyers that add value to the unit or the purchase process. This can include different deposit structures (extended or reduced), discounts on parking and storage lockers, free unit assignments, or reduced assignments fees. There is a broad range of incentives that vary depending on the building, but they should not be the only consideration. If incentives are being offered, there is likely some reason that the developer was unable to sell their units.

What if I Miss a Deposit?

If you miss a down payment deposit, your purchase agreement should highlight exactly what happens. In most cases, if a cheque bounces, you should be given a certain amount of time to submit a new cheque. If you miss a down payment and you do not settle your account, then you have violated your contract, which means your developer can reclaim their unit. In any case, you will likely face a penalty of between $300-and $500 if you fail to make a payment on time.

Do I Receive Interest on My Pre-Construction Deposit?

The Condominium Act states that developers must pay interest on any deposit amounts paid by you, the buyer. This serves as an incentive for builders to complete their projects on time and to avoid delays. Interest starts accruing as soon as the developer receives the money. Unfortunately, this interest rate is set at “2% per annum below the bank rate”. With a current Bank of Canada rate of 0.25%, the interest rate you “earn” is 0%. You should not expect to earn any interest on your deposits as the bank rate has not been above 2% since 2008.

The information displayed is for reference only. WOWA Leads, Inc. does not guarantee the accuracy of our information and is not liable for its use or misuse. Illustrations are the artist’s concepts and may not be representative of the final product.

How do You Generate Passive Income?

It's time to lease out your new condo unit to someone in need of a home. You can strategically charge rent so tenants cover your monthly carrying costs including your mortgage, maintenance fees, and surplus; this is where you can generate positive cash flow. By letting a tenant pay down your mortgage, you're allowing the overall value of your condo unit appreciate while you've only invested a net of 20% on the original price. This is how you generate a positive cash flow and long-term equity growth.

What Should I Expect During the Interim and Final Occupancy Stage?

There are two closing dates during the process, the Interim Occupancy stage and the Final Closing stage. This also means that you will meet with your lawyer twice during the closing phase.

You'll first meet your lawyer when the developer reaches out to inform you of your Interim Occupancy. Be prepared to make any outstanding deposits and occupancy fee payments at this time. Please note that during the Occupancy Period you still do not own your suite. Your mortgage or final payments will not occur until the Final Registration date.

We also advise you to contact your lender approximately one year prior to your occupancy date and have your mortgage approval letter updated to avoid any increased interest rates.

The second time you'll meet your lawyer will be shortly before the final closing date to sign all the documents and officially transfer the ownership of your suite to you. Your mortgage will commence and your lawyer will explain all of the outstanding costs to finalize the purchase.