How To Buy A Presale Condo | VREP #61

 

Ever wondered why you need a Realtor® when buying a Presale condo? Adam and Matt answer a reader’s question and offer some helpful advice in this week’s VREP short.

 

Adam:  Okay, Matt, so VREP Short # 8.

Matt:  Episode 61.  That’s right.

Adam:  Okay, so today we’re talking about should I use a realtor when I buy a presale condo.

Matt:  And this was brought to our attention by a listener

Adam:  Right.

Matt:  who sent an e-mail on and we should say we have addressed this before, Episode 14 Should I Buy A Presale.  That’s an in depth look at the multitude of reasons why you

Adam:  Yeah.

Matt:  should use a realtor.

Adam:  Yeah, so if you want a more comprehensive answer, go back to that episode but Brayden, what was the question?

Brayden:  Yeah, it’s from Troy and he says I understand using a buyer’s agent when buying a used house or condo but do you need one when buying a preconstruction condo?  There’s no inspection, previous sales or minutes to look over as the building isn’t built yet so what role if any would a buyer’s agent play?

Adam:  Well, the short answer is yes.

Matt:  Yes, you should.

Adam:  Yeah, but Matt.

Matt:  So we’ve got four key points here to make.  First off you should use a buyer’s agent to provide a market analysis.

Adam:  Absolutely, so when you’re buying a presale condo don’t treat it any different than any other property.  You need to know if what you’re paying seems appropriate for the level of finishes, for the quality of construction,

Matt:  and the location

Adam:  for the location, for the square footage.  Does it all make sense?  Should you be paying what the advertised price is and should you be rushing to pay that price.  Does it make sense?

Matt:  That’s right and a buyer’s agent can provide you with that information.

Adam:  Yeah, a comprehensive market analysis.

Matt:  Second, developer credibility and local knowledge.

Adam:  Yeah exactly, so what a buyer’s agent can help you do in this case is look at the credibility of the developer, the potential future growth of an area and also the potential for resale of a particular unit,  so where it’s positioned in the building or the floor plan.  These are all things that a buyer’s agent who works with buyers consistently and sellers consistently can actually advise on and make sure that you’re protected and that you’re making a smart investment.

Matt:  Yeah, I mean the key point here is the sales rep works for the developer so

Adam:  Right.

Matt:  so they can be telling you all sorts of things but they’re trying to sell you a product, right?

Adam:  They work for the developer and Matt, number 3, Disclosure Statement?

Matt:  We go through Disclosure Statements…whew

Adam:  Ad nausea

Matt:  Yeah, I mean, I mean, we’ve been through more disclosure statements than we care to talk about.

Adam:  I’m reading one right now.

Matt:  Yeah, so the key thing here is the first time you look at this hundreds of page document

Adam:  Yeah.

Matt:   it’s overwhelming, it’s daunting.  You have no idea what you’re looking for.  You want somebody that goes through these all the time to be able to isolate what’s important, pull out the key information and present it to you in relation to other disclosure statements

Adam:  Absolutely.

Matt:  and other developers.

Adam:  And these are written by lawyers that work for the developer.  They always favour the developer and not the buyer, the end user, so you need to read them with a critical eye and you need to know what to look for.

Matt:  That’s exactly right.  Last and very important is access,

Adam:  Access.

Matt:  early access.

Adam:  So we’ll give you an example. There’s a project that has just been released to realtors downtown.  They did the realtor preview.  It’s before the public launch which is coming soon.  We’ve had access to that project now for about two months or so because of our relationship with the developer.

Matt:  People writing contracts for about two months

Adam: Yeah, so it depends.  There’s agents out there that focus on presale.  They might have relationships with developers.  They might be able to get you in before the general public and in a market like this where presales are very tough to get in a lot of cases…

Matt: Very competitive.

Adam:  It’s very competitive.  You want access so you can get the best unit first.

Matt:  That’s right and it’s easy to go online and look at the 100, 150 different websites promising you access and become very cynical but one thing’s for sure if you wait for the public event you are going to have slim pickings, the last units available.

Adam:  For sure.

Matt:  They’ve all been sold to insiders and we can definitely help you with that.

Adam:  So there you have it folks.  Like we said check out Episode 14 if you’re interested in more about presale construction.

Matt:  Absolutely and thanks so much Troy for the question.

Adam:  And Happy Easter.

Matt:  Happy Easter. Take care guys, we’ll talk to you on Wednesday.

 

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