Read This Before Buying Presale in Squamish

Welcome to the TL;DR version of countless real estate blogs. As a real estate advisor, I understand that navigating this industry is an ongoing learning process. With its fluid nature and constant changes, I aim to share my knowledge so you feel empowered to make informed decisions throughout your real estate journey. No fluff, just the essential insights you need. 

Happy learning,

Cass

There’s lots of reasons to love presale opportunities, and if you’re willing to do some long term planning and due diligence, they can be a great option. Interested to learn more? Read on. Your research can start (but should definitely not end) here. 

BROAD STROKES

• Presale properties in BC are typically sold in three stages: conceptual, during construction, and as completed but not yet occupied units. 

• Developers use pre-sales as a way to demonstrate to their lender a market demand for their product. 

• Purchasing a pre-sale is not the purchase of an existing physical property, but rather a contract for the right to receive, and an obligation to pay for, a finished unit at a point in the future.

• Disclosure Statement: A very lengthy document developers are required to give you that includes important information like critical dates, strata information, site details, and more. So much more. Read it, and better yet, have your lawyer read it too. 

• 7 day rescission period - After your offer is accepted, you have 7 days to revoke your purchase agreement. 

DO YOUR RESEARCH

On the Developer: 

• Look for established and reputable developers with a track record of delivering high-quality homes on time. Find out their experience in building the type of property you're interested in and seek out testimonials from past buyers, if possible. (Talk to a real estate advisor)

On the Development:

• Think big picture, not just the unit you’re interested in. You’ll be paying for the amenities offered through strata fees, so think about how they align with your lifestyle and preferences. 

• Explore the surrounding neighborhood. Understanding the overall appeal of the location can significantly impact your satisfaction with (and the value of) the property in the long run.

On the Unit: 

• Buying a presale requires a bit of imagination since you’re purchasing something that doesn’t actually exist yet. If you’re lucky, developers have a display home you can walk through, but this isn’t always the same layout as the one you want. 

• Hot Tip: Take measurements of your furniture (or furniture you’ll want) and bring them with you to the model unit or compare to floor plans. Ask to see floor plans with measurements! 

• Understand what’s being shown in renderings that isn’t part of the standard package

$$$ THINGS

Deposit Structure

• Each presale development will have its own deposit requirements and payment structure. Usually between 15-20% of purchase price to be deposited in phases.

Additional Costs

• The list price may not include optional upgrades, hook up fees, and more

• GST!!! Know who is responsible for paying. 

• Monthly strata fees - something to keep in mind when planning

• Property Transfer Tax - there are some new construction exemptions out there, talk to an advisor!

UNDERSTAND THE RISKS

• Development Delays - it happens! 

• Market Fluctuations & Policy Changes - Squamish is a growing city but the real estate is constantly changing. Be aware of what could happen if the market takes a turn!

• Changes to the Plans - developers often leave themselves a little wiggle room to make changes to floor plans, fixtures, or appliances. 

• Mortgage Uncertainty - talk to a mortgage broker about financing before purchasing a presale. 

DON’T FORGET TO NEGOTIATE

Depending on the demand for units and developer’s financing requirements, you may not be able to negotiate the purchase price. However, there are still plenty of ways to sweeten the deal for yourself.

• Decorators Allowance 

• Reduced deposit payment or an amended deposit schedule

• Additional storage lockers or parking stalls  (or asking to choose)

• Interior upgrades 

• Fee caps

QUESTIONS TO ASK 

• What’s included in the purchase price? And more importantly, what are you showing me that ISN’T included in the purchase price? 

• What are the optional upgrades?

• How is my deposit money being held?

• What is the completion date and what happens if there are delays?

• What is the protocol if the developer does not achieve their financing targets? 

• Are the contracts assignable? What are the fees and/or restrictions? 

• What is the chance that the view from my unit will change in the future?

FINAL THOUGHTS

• The contract and disclosure statements are always going to be written in the developers favor, make sure you talk to the relevant professionals to fully understand what you are signing

• There’s obviously a lot to know when it comes to purchasing a presale property (more than I can cover in one blog post), which is why it’s important to have a real estate advisor who can walk you through every step of the process with your best interests in mind. 

• Questions? Drop me a line at 778-970-5573 or cass@squamish.com 

**The information provided in this blog is for general informational purposes only. Readers are encouraged to conduct their own research and seek professional advice from qualified experts before making any decisions. Every real estate transaction is unique, and what may be applicable in one situation may not be applicable in another. In addition, please note that laws and regulations regarding real estate matters may vary by jurisdiction, and it is your responsibility to ensure compliance with applicable laws and regulations in your area.