Well, it depends on your immediate needs and how comfortable you are to wait for the completion of the presale, as many factors can change when purchasing a presale home, i.e. interest rates, jobs, where you want to live. The completion dates are only an estimate and usually extend months to years past their expected date. In the last couple of years COVID has put stress on our building supplies which has delayed projects at a minimum of 3 months and in most cases even longer. That being said, there are many things to consider.
I’ve included a few things to ask yourself when trying to make the choice that best suits your needs.
RESALE HOME
Pros:
- Resale homes purchased through the MLS® tend to be cheaper per square foot than a new home – and there’s no GST to pay.
- Resale homes are already built, which enables you to view the exact home you will be living in – no unexpected surprises about space, feel, views and so on.
- As the resale home is already built, there’s no need to wait years to move into your new place
- What you see is what you get – and a home inspector can inspect the unit thoroughly, in person, before you remove subjects.
Cons:
- A resale home has been lived in before – the unit’s fixtures and fittings, will unlikely be brand new (unless it has just been renovated) and may wear out sooner.
- The building also won’t be brand new – and the older the building, the more wear and tear it will have, which means maintenance costs.
- There won’t be a new home warranty. Anything that goes wrong, even if it is within the first 5 years will be on your dime to repair.
PRESALE HOME
Pros:
- You’ll get a brand new, never-before-lived-in unit that is (or should be) in top-notch condition and will be under a New Home Warranty.
- New home developments usually have great amenities and be in established or up-and-coming neighbourhoods.
- You could have the chance to customize your unit to your own tastes, or at least choose from colour and design options offered by the developer.
- Build equity in your initial investment of 10-20% down without monthly payments. Can be a great investment rather then buying a rental property, which has monthly expenses and tenants to deal to with.
Cons:
- New homes are desirable, which means New or Presale homes tend to cost more than resale homes per square foot
- You will have to pay GST.
- Your chosen home won’t be built yet, so there could be a long wait to move in – and even if the value drops in that time, you’ll still pay the contracted price. A lot can change during that time and you will need to be sure you can get a mortgage and a down payment prior to the completion date.
- You might get a pretty good idea of the home you’ll be getting, but show suites and floorplans can sometimes seem quite different than your finished unit – especially in terms of intangibles like views and “feel”.
- No Guarantee of a Mortgage – In most cases, it is possible to get a mortgage on a pre-sale property. BUT there is no guarantee. Consult with your lender, bank, or mortgage broker before purchasing a presale.
- NO GUARANTEE OF PROFIT! – Making money from investing in condo presales in Vancouver has been very popular. In many instances, investors have made significant profits from investing in lower mainland presale condos. In a rising real estate market, presales can be profitable, but there is no guarantee of profit as there is no guarantee prices will rise. If the market falls, the buyer is still required to complete on the presale OR assign their contract.
My suggestion, when you’re looking to buy a presale condo in the Sea to Sky is to ALWAYS contact a Realtor to help. Do not rely on the developer to provide you with insights on the market and whether their presale is the best option. Over 30% of my business are presale purchasers, I have worked with many developers and can provide insights into which are great investments and which to stay clear of.
With experience in selling both presale and resale, either option can be a great investment. It all comes down to timing, neighbourhood, builder and cost.