In the hunt for a perfect home, there are a variety of reasons why many people decide to purchase a new or pre-construction condo. Some may be drawn to the ease of incrementally paying the deposit, while others want to be the first person to live in a home, picking their finishes and customizing the layout. Many still are drawn to the benefit of their home rising in value while it's being built.
One thing that often all these people have in common is their curiosity in what exactly is involved with reserving and/or purchasing a unit. For those, we hope the following information is helpful.
If you require any further clarification please book an appointment and we would be more than happy to discuss further.
When a condo building opens for sales units are available on a first come first serve bases. In hot real estate markets and especially with popular condo developers it can sometimes be very tough to purchase the unit you want due to high demand. Being aware of this some developers will allow family members, staff and some close friends to reserve a unit before they become available to the general public.
Book an appointment if you would like more info about reserving a unit.
A deposit is the money you submit to secure a property you wish to purchase. The deposit will be placed into a trust account. Shortly after you take occupancy of your condo and the deal is finalised with the bank, your deposit will be applied towards the home’s total purchase price. The down payment is a combination of your deposit and any other funds you plan to personally put towards your mortgage.
It shows the seller you’re serious and committed to buying their property. It also demonstrates that you have the financial means to make the purchase.
Another reason deposits are required is because builders need to borrow funds, too. Generally speaking, lenders require builders to collect 15% in deposits and have 70% of units sold before they’ll release funds that builders will then use for construction.
If you’re interested in purchasing a condo from Surface a $10,000 deposit, payable by cheque, is required when signing an APS ( Agreement of Purchase and Sale). After 30 days the remainder of 10% of the purchase price is due. Keep in mind the initial $10,000 deposit will count towards the 10%. After 90 days a final 5% is due.
If you purchased a $300,000 condo
$10,000 to reserve or purchase unit
$20,000 within 30 days (10% – deposit)
$10,000 within 90 days (5%)
Although we tried to simplify this information as much as possible we understand it can be a lot to digest. If you have any further questions in regards to this article, Wellington West Lofts or Surface please feel book an appointment and we would be happy to discuss further.
