Pre-Construction Homes | Page 4 | GTAMotorcycle.com

Pre-Construction Homes

strictlye said:
However, I wouldn't buy a condo pre-construction. Once the property is 75% complete they will start charging you inhabitance fee or something like that. And it can be more than what your mortgage is.
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Not 75%. 1st floor moves in first. Then as each floor is "complete". They move in. When all floors are complete builder registers building.
But the time from when you move in to when the building is registered you pay an occupancy fee. This can be as long as 18 months or more. The fee is the difference between your down payment and your purchase price. One way to avoid this is (if you have the money) is to put the entire amount in trust with the lawyer, then no fee (not all builders allow this) then when registered, mortgage the property.
That's how I will do it if I buy a condo investment. Mortgage the house, and pay the payments until the building is registered.

Sent from the Purple Zone
 
Flip house/spec house, buy where ever you think the market will accelerate the fastest.

Place i'm going to live in? I need that post construction. I'll drive through the area at various times of the day and weekend daytime. I do not need to buy the house beside the guy that is building a street stocker race car in the drive, stores a 30ft camper in the drive or keeps live chickens. Or has 5 cars and 3 families living at the address. My backyard time does not include listening to 9 kids in a 24ft above ground pool. And they better stay off my lawn.
 
How much money is actually required in order to purchase a pre-construction house/town/condo? I'm not 100% sure and am curious as it's something I've just thought of briefly but never really had the cash on hand for the deposit. Is it 10%? 20%? And the money you put down goes towards your deposit on a mortgage anyway, so that def helps out as well. However I think the market where to do this is now outside of the GTA. Have a few friends that bought in Alliston and made out like bandits within 1-2 years of purchasing. Avg increase of 150-200k tax free while they waited, and then lived a year and a bit there.
 
mimico_polak said:
How much money is actually required in order to purchase a pre-construction house/town/condo? I'm not 100% sure and am curious as it's something I've just thought of briefly but never really had the cash on hand for the deposit. Is it 10%? 20%? And the money you put down goes towards your deposit on a mortgage anyway, so that def helps out as well. However I think the market where to do this is now outside of the GTA. Have a few friends that bought in Alliston and made out like bandits within 1-2 years of purchasing. Avg increase of 150-200k tax free while they waited, and then lived a year and a bit there.
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The mortgage rules changed I believe in the past 12 months. In the past it was 5% downpayment minimum on anything ... anything between 5 and 20% is subject to CMHC fees though.

That changed I believe to 5% of the first $500k and 10% of any amount above $500k up to $1M and 20% for anything above $1M... and CMHC fees kick in for anything less than a 20% downpayment.
 
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chiller said:
The mortgage rules changed I believe in the past 12 months. In the past it was 5% downpayment minimum on anything ... anything between 5 and 20% is subject to CMHC fees though.

That changed I believe to 5% of the first $500k and 10% of any amount above $500k up to $1M and 20% for anything above $1M... and CMHC fees kick in for anything less than a 20% downpayment.
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Thanks but I meant to the builder, not the bank. You need to put a deposit on a pre-construction house and am curious what that value is. 5/10/15%? The remainder will go towards the bank deposit to the mortgage holder. If I understand correctly the original deposit to the builder, is taken away from the mortgage down payment, which allows you to build that down payment over time while the property gets built.
 
mimico_polak said:
Thanks but I meant to the builder, not the bank. You need to put a deposit on a pre-construction house and am curious what that value is. 5/10/15%? The remainder will go towards the bank deposit to the mortgage holder. If I understand correctly the original deposit to the builder, is taken away from the mortgage down payment, which allows you to build that down payment over time while the property gets built.
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Oh I see what you mean. The deposit amount to new construction. All builders are slightly different and you'll need to check with your specific builder your looking at. An example for us:

First builder was 10,10,10,10 (signing,30,60,90) and all upgrades were able to be included as part of the final purchase price.

2nd builder was also 10,10,10,10 but you had to cash up front the first 25k in upgrades. Anything after 25k can be included in the final purchase amount.

3rd builder was 15,15,10,10. The first 20k up front for upgrades. The rest in your final purchase total.


An extreme example of expensive houses that we just looked at but would never be able to afford was 40,20,20,20 and the first 100k upgrades in cash. And remainder in your total. But that was a 5 million dollar house
 
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mimico_polak said:
Thanks but I meant to the builder, not the bank. You need to put a deposit on a pre-construction house and am curious what that value is. 5/10/15%? The remainder will go towards the bank deposit to the mortgage holder. If I understand correctly the original deposit to the builder, is taken away from the mortgage down payment, which allows you to build that down payment over time while the property gets built.
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Usually 20% spread over a period of time. 5% at signing, 5% in 30, in 90, and towards closing.

You'll find some builders only asking 5% but from what I've seen, its offered as an incentive on standing inventory, aka the units nobody else wanted to buy. Do your research!
 
strictlye said:
I bought pre-construction and its the BEST decision I have ever made.

Small down payment, I didn't have to start paying a mortgage for almost a year which gave me time to save for my closing costs. The house has all the finishes that I want. I don't have to gut it and start from scratch to rebuild.

Everyone in my neighbourhood is selling and making $150k - $250 after living in the home for less than 1 year. The prices are sky rocketing and if you get into a first phase of a new development its your best option. Once grocery stores, schools churches start to be built in the neighbourhoods the price goes up drastically.

However, I wouldn't buy a condo pre-construction. Once the property is 75% complete they will start charging you inhabitance fee or something like that. And it can be more than what your mortgage is.
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This. Pre-construction is THE way to go, and is the best way to make the most out of a home purchase. More can be made than selling on assignment, but then again, more has to be invested.

"Flipping" houses became harder after the 90's because the gov't put in a rule that you must occupy the house for 12 months (after closing) before selling, but it's not like it's value won't increase after closing. you'll still get a good return, you just have to wait longer. I'm surprised selling on 'assignment' is legal, as it essentially ruins people's opportunity at getting an affordable place to live. It's kind of scummy if you think about it.

I haven't been as lucky: the first house I bought was 7-years old, back in 2011. It's value has increased, but not as sharply as it did for the first owners. Its rented now, and while the cash-flow monthly is positive, the year-end taxes are higher than the income it generates, so I'm in the red unless I offset my income taxes with RRSP deposits (which I do). Still it's a kick in the pants, and Ontario can kiss my ***.

Our second house we bought as 'inventory'. The builders need to sell 80% of the units they plant to build before they can get a loan from the banks to start building. our home was in the remaining 20% - and because we waited, we paid about $30k more than our neighbors for similar units. That only worked out to 4% more overall, so not too much of a kick in the pants, especially when we consider that we love the house itself.
 
How does one find out about future preconstruction sites?

My google-fu is weak - when I try search for it, it's all links to existing projects that are already underway or selling existing ones.

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moarmoto said:
How does one find out about future preconstruction sites?

My google-fu is weak - when I try search for it, it's all links to existing projects that are already underway or selling existing ones.

Sent from my SM-G930W8 using Tapatalk
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drive straight west from Mississauga, all those corn fields..... those are future construction sites
 
crankcall said:
drive straight west from Mississauga, all those corn fields..... those are future construction sites
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Yes I know.... I used live in Oakville near Trafalgar and regret not getting into it years ago.

I was asking more in terms of how and when to contact developer for best price. Or is that even possible without insider knowledge or connection? I assume by the time you see ads or billboards, it's kinda late. Am I wrong?

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moarmoto said:
How does one find out about future preconstruction sites?

My google-fu is weak - when I try search for it, it's all links to existing projects that are already underway or selling existing ones.

Sent from my SM-G930W8 using Tapatalk
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Many builders have preferred real estate agents that they deal with for upcoming sites. Find a builder you like and see if you can find an agents names that pops up often on their previous projects, call that agent.

If you are interested in a specific area, you can talk to the municipality and see what developments are working their way through the planning process. This doesn't always work as I know of a least a few condo towers that have almost sold out Phase 2 and the lands are still not zoned for residential and they do not have an approved site plan. The more you know about the system the more disappointing it is.

Crankcall has it right. Almost everything green within commuting distance of the GTA has already been optioned or outright purchased by developers.
 
moarmoto said:
How does one find out about future preconstruction sites?

My google-fu is weak - when I try search for it, it's all links to existing projects that are already underway or selling existing ones.

Sent from my SM-G930W8 using Tapatalk
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Sign up on the builder's sites for emails
Also get an "in" with a realtor that sells for builders. You can get into a pre vip sale that way. But limited inventory.
Last time I went for one of those there were 300 of us for 10 units.

sent from my Purple LGG4 on the GTAM app
 
moarmoto said:
Yes I know.... I used live in Oakville near Trafalgar and regret not getting into it years ago.

I was asking more in terms of how and when to contact developer for best price. Or is that even possible without insider knowledge or connection? I assume by the time you see ads or billboards, it's kinda late. Am I wrong?

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Most developers that I have dealt with aren't really interested in talking to the public before the trailer opens. That's why they pay real estate agents to act as aggregators, they want someone to come to them ready to buy multiple houses with minimal fuss. Even employees of developers only get discounts off asking price of <<5%.
 
Sign up for notification from vendors, get in touch with RE agents, gotcha.

Thanks for info.

I currently own a freehold townhouse in Burlington (single garage, long single driveway) but it can be annoying to manage 3 bikes and 2 cars.
So I thought next home upgrade could possibly be a new build with at least 2 car garage.

1st world problems I know.

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moarmoto said:
Sign up for notification from vendors, get in touch with RE agents, gotcha.

Thanks for info.

I currently own a freehold townhouse in Burlington (single garage, long single driveway) but it can be annoying to manage 3 bikes and 2 cars.
So I thought next home upgrade could possibly be a new build with at least 2 car garage.

1st world problems I know.

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Make sure the 2 car garage is big enough for your needs. We bought a pre-construction home with a 2 car garage, but the garage isn't big enough to fit our minivan.
 
Plant_W said:
Make sure the 2 car garage is big enough for your needs. We bought a pre-construction home with a 2 car garage, but the garage isn't big enough to fit our minivan.
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Good point, make sure the plans you buy from have actual dimensions, not just items placed in them. I know some condos that showed what appeared to be a queen bed and two side tables in the bedroom, they had scaled the furniture, in reality the bedrooms fit a double bed and single side table. Owners were crying when they moved in.
 
All the pre construction homes I bought I had driven thru those neighbourhoods first and noted down the names of every builder in that area. Then went to their website and signed up for emails.

I essentially bought the day I was invited for my appointment. On my 2nd place I was the 2nd person in the neighbourhood to sign so I had a choice of models and lots. On my most recent I was almost the second last one but that's ok the lot I wanted no one else wanted to pay the premium for it I guess lol. So I still got the lot I wanted.
 
chiller said:
All the pre construction homes I bought I had driven thru those neighbourhoods first and noted down the names of every builder in that area. Then went to their website and signed up for emails.

I essentially bought the day I was invited for my appointment. On my 2nd place I was the 2nd person in the neighbourhood to sign so I had a choice of models and lots. On my most recent I was almost the second last one but that's ok the lot I wanted no one else wanted to pay the premium for it I guess lol. So I still got the lot I wanted.
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I'll be doing that.

By the way, is the story true? There's massive line up's and that you need to be there early, maybe days prior (eg. Like iPhone release) ?

Or is that exaggerated?

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moarmoto said:
I'll be doing that.

By the way, is the story true? There's massive line up's and that you need to be there early, maybe days prior (eg. Like iPhone release) ?

Or is that exaggerated?

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Each one is different. Our second one had 30 people show up for the appointment. They had 30 lots on sale that first day. At the end of the day they sold 27 of them. Our most recent one they didn't have appointments only a day they were releasing. They were releasing like 100 I think ? Probably 300-400 people showed up.
 
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