Have you heard someone use the term "pre-construction condo"? What kind of housing is it, and is it the best option for you?
Well, as the name suggests, a pre-construction condo is an off-plan condo purchased before the development process. Although, when thinking about living in condos, they have their own pros and cons. However, it can be an incredibly exciting way to buy a property, but there are many things about pre-construction condos that homebuyers need to consider before taking the plunge.
This article will explore a detailed guide about pre-construction condos, how they work, and why they might or might not be the ideal option for you. Let's get started;
What are the Perks of Buying a Pre-constructed Condo
A pre-construction condo is a condominium that is not yet built. The developer sells the units in the building before it is constructed. Buyers purchase their units based on floor plans and renderings, expecting the finished product to look like what was promised.
Since the developer wants to generate interest and sell as many units as possible before construction begins, pre-construction condos are typically discounted. This can be an excellent opportunity for buyers looking to get into the market at lower prices.
Besides all the good sides, there are some risks associated with pre-construction condos that buyers should be aware of before making a purchase. These could be things such as the finished product may not look exactly like the floor plans used to sell the units and that construction delays can also occur.
Despite these risks, pre-construction condos can still be a good option for buyers willing to take on some uncertainty to potentially get a great deal on their purchase. If you are considering purchasing a condo before it's finished, do your research.
Advantages Of Buying A Pre-Construction Condo
If you are planning on buying a pre-construction condo, there are several advantages that you should be aware of. Here are several reasons why purchasing a pre-construction condo can be a great decision:
Get A Great Deal
When you purchase a pre-construction condo, you can take advantage of early-bird discounts. Pre-construction condos are often priced lower than similar units that have already been built. This is because developers are incentivizing buyers who purchase early before construction is complete.
You can also choose your unit. In the pre-construction condo, you have the freedom to choose the specific type of unit that you want from the available floor plans.
Building Process Is Faster Than Building From Scratch
If you build your own home, the process can be lengthy. When you purchase a pre-construction condo, the building process is typically much faster since much of the work has already been done. You can also customize your unit to suit your needs and preferences.
However, a faster building process can also vary depending on the project. Builders are typically driven to finish the project as soon as possible because they have a deadline to meet.
Pre-construction condos offer a lower price than purchasing a condo that is already built. When you purchase a pre-construction condo, you are essentially buying the home at discounted prices.
As a buyer, you can save a lot of money and also get the opportunity to customize the home.
Variety Of Floors To Choose From
When purchasing a condo under construction, you have various opportunities to choose the best floor. This allows you to find the perfect layout for your lifestyle and requirements.
Whether you are looking for a small one-bedroom unit or a large three-bedroom unit, you will be able to find the perfect one.
Access To Amenities That Other Housing Don't Offer
Another significant benefit of purchasing a pre-construction home is access to amenities that are not available in other types of housing. For instance, many pre-construction condos come with a fitness center, swimming pool, or other services.
Disadvantages Of Buying A Pre-Construction Condo
Before making such a big purchase, ensure you investigate the location, size, and other factors properly and leave no stone unturned. Here are a few drawbacks you must know.
Delay In Construction
Delays in construction are one of the major disadvantages of a pre-construction condo. While it's always possible that construction can be delayed for many reasons, it is more likely to happen with a pre-construction condo than with traditional homes. This can lead to disagreements or issues that need to be resolved.
Defects In The Units
When you buy a pre-construction condo, there is a chance that defects in the units will be discovered after you buy them. Additionally, it can also be possible that builders may use lower-quality materials in the construction of the unit that we do not usually notice while purchasing, which can lead to problems down the road.
No Fixed Price
In a pre-construction condo, there is no set price for the unit. The developers may increase the price at any time, and you will be required to pay the increased amount. This can be a problem if you are on a tight budget and have already been approved for a mortgage based on the unit's original price.
Another major disadvantage is that the value of the condo may not increase as much as you expect, or it may even decrease in value. The interest rate can also rise before your condo is completed, which could increase your monthly payment.
How Do You Know If A Pre-construction Condo Is Right For You?
If you are planning to buy a pre-construction condo, you must be comfortable living in an unfinished place. There may be construction noise and dust during the day, and the services may not be available until after moving in.
You ought to be aware of any potential risks, such as the builder failing to deliver on their promises or the project failing to be completed on time.
There is also a risk that the unit's value may not appreciate. So, you need to be prepared to put down a deposit and wait for the unit to be completed, which can take up to two years or more.
How to Buy a Pre-Construction Condo
When you buy a pre-construction condo, the builder will give you an estimated completion date, and you will put down a deposit to reserve your unit. Here are a few steps you need to know about the purchasing process:
Research: Make sure you do your research on the developer. Look at their past projects and see if they have been completed on time and up to par.
Risks: Be sure of the risks involved. Since the structure has not yet been constructed, there is constantly a chance that something could go wrong during construction, whether it is material or infrastructure.
Expectations: Set realistic expectations. It is important to remember that a pre-construction condo may not be exactly as you envisioned it. There may be chances to make some changes during construction that are out of the developer's control.
Be Prepared to Wait: Even if everything goes according to plan, it will still take some time for your unit to be completed. So if you are not patient enough, a pre-constructed condo may not be the right purchase for you.
Pre-constructed condos are an excellent way to invest in real estate, as they offer many features and come with advantages like a lower price, a better location, etc. But it's not good for everyone! If you are not willing to wait throughout the process and are not ready for some ups and downs, it's better not to invest in pre-construction condos.
However, if you are considering buying a pre-construction condo, be sure to do your research well ahead of time to make the best decision possible and ensure your investment pays off down the road.
Can I invest in a pre-constructed condo and then sell it before it's finished?
Yes, you can resell it before it is completed. Before that, it's essential to understand the contract you signed. There may be some clauses that prohibit resale.
How do I know if the pricing is fair?
The best price deals are only available at this early stage. You can research the average price per square foot for similar condos in the area. This will give you a good baseline to compare prices.
You can also look at the development plan and see how many units are planned for the project. If there are a lot of units, the builder may sell them at a lower price.
Do I require a property agent?
It's up to you because if you feel comfortable negotiating the price on your own, then go ahead. If you are a first time buyer, you should be aware of a lot of mistakes
you can make. So, an experienced property agent can provide valuable insights and assistance in negotiating the purchase price, reviewing the contract, and understanding the risks involved in a pre-construction purchase. The agent will help you ensure that you get the most out of your money.