A pre-sale is when a developer sells a buyer a property before that property is built or completed. The Buyer purchasing the pre-sale is buying the right to a completed property that will be built in future.

Buying pre-construction condos have become a very popular option for many homeowners and investors in Vancouver. It allows these buyers to have the benefit of prices increasing without having to pay a mortgage, property taxes, maintenance fees, or deal with troublesome tenants. Pre-Sales also allow owner-occupiers the ability to customize the property they buy. However purchasing a pre-sale comes with its own set of risks to understand, and here’s what you need to know.

When purchasing pre-sale, you only need to have your down payment available. Depending on the contract there may be other smaller payments along the way, based on the schedule of construction. Generally, the entire payment is not due until the building is completed, which may provide a few extra years to save and qualify for your mortgage amount.

Your down payment and deposits are held in a lawyers trust account. This restricts the developer from accessing the funds until he building is complete.

New properties are subject to mandatory home warranties and insurances. This gives you a minimum of two years on the labour and materials, five years on the building envelope, and ten years on the structure of the building.

Being involved from the start may give you the opportunity to customise the layout, finishes, colour scheme and more to make sure the property you move into is the one you want, from day 1.