If you’re looking into buying a condominium in Toronto, you may be weighing the pros and cons of purchasing pre-construction or resale. We’ve laid out the benefits and disadvantages of each scenario—but you can always reach out to our team so we can help you find the best fit for your needs.
Buying a pre-construction condo
If you buy a pre-construction condominium, it means the building and unit aren’t finished yet—and sometimes construction hasn’t even started. Basically, you can reserve the unit and ownership is transferred to you upon completion of development.
- You can customize your space. If you want to be able to choose how your home will look—such as the layout, colours, finishes, and appliances—purchasing pre-construction gives you that opportunity.
- Take your time saving your down payment. Pre-construction deposits are spread out over a long period of time. You could have a year to come up with the down payment as a result, and you won’t have to worry about the price of the unit increasing during that time.
- You could save money. Though there’s no guarantee, pre-construction condos can be a good investment in the long-term, as the pre-sale price is usually less than current resale condos.
- The waiting game. When you buy before the building has even broken ground, it will likely take years before it is completed and ready for you to move in. Although builders provide an estimated occupancy date, delays are inevitable – everything from weather to availability of materials or skilled labour can delay the occupancy date.
- Phantom Mortgage. Once the building is finished and you get occupancy, there is some time until it is legally registered as a condo corporation. During this time the ownership cannot be transferred to individual owners. That means you can’t start paying your mortgage. What you end up paying are occupancy fees, which go to the builder and not towards your mortgage.
Buying a resale condo
A resale condo is built and ready for you to move in. Often, you’re purchasing it from previous owners.
- You get to see the unit. If you don’t like purchasing anything sight unseen, resale may be the better option for you. You can walk through and see what it looks like, how big or small it feels, and get a sense of the layout in real life.
- Move sooner—and know when. As with most home sales, you can negotiate a firm closing date so you know exactly when to plan your move.
- You can’t customize it. With a resale condo, what you see is what you get. If the carpets need replacing, the bathroom needs updating, you’ll need to factor in the expense (and trouble) of repairs when determining your purchasing budget. On the other hand, a renovation is always something you can undertake in the future if it’s something you can live with for a while.
- The price isn’t set. As with most home sales, the asking price is just a starting point—buying resale means there’s potential for a bidding war.