As a First-time Homebuyer, You May Be Considering Purchasing a Pre-sale Home.

Source: MLA Canada

Recently, the Canadian government introduced the First-Time Home Buyer Incentive (FHSA) to aid Canadians in saving for the down payment on their first home. First-time homebuyers can save up to $40,000 for the down payment, and the contributions made towards the savings account are tax-deductible. Withdrawals made for purchasing the first home are not taxable, and the maximum annual contribution to the account is $8,000 per year. The FHSA is expected to offer $725 million in assistance over the course of five years.

Considering the recent introduction of the new policy, we believe it is an ideal time to revisit the essential do’s and don’ts of purchasing a pre-sale home, especially for first-time homebuyers. Pre-sale homes are a viable option for those who want to be particular about their location and design preferences.

First and foremost, it’s crucial to work with a realtor who specializes in pre-sale homes. A knowledgeable realtor can guide you through the search and closing process, provide valuable insights into promotions and incentives, and paint a better picture of the final project within its pre-construction context.

One common mistake to avoid is viewing homes outside your budget. Determine the maximum loan amount and total monthly payments, factoring in all other costs, including inspections, insurance, move-in fees, property taxes, maintenance, repairs, renovations, strata fees, and utilities. Viewing homes outside your budget could lead to either making a purchase you cannot afford or creating unfair comparisons with the places targeted initially.

Another essential consideration is to research the area to ensure that living in the community is a viable long-term option. Find out how walkable the neighbourhood is, whether public transit is nearby, whether schools are highly rated, whether there is access to amenities such as retail, restaurants, and grocery stores, and whether further development will be down the road.

When choosing a realtor, it’s essential not to base your decision solely on the number of listings they have. Do your due diligence before choosing a realtor. Get a referral from friends or family, read reviews, and go to an open house to gauge compatibility. Also, visit the BC Financial Services Authority’s website to check for any recent license suspensions.

Before making an offer on a pre-sale home, get pre-approved for a mortgage. Pre-approval will help you determine your budget and give you an advantage when competing with other buyers for a pre-sale home. It will also ensure you are ready to move forward once you find the right pre-sale home.

Finally, it’s crucial to take your time and not rush the process. Consider getting legal advice before signing the contract and be sure to read and understand the contract and disclosure statement. Pre-sale homes have their unique considerations in the real estate world, with more decisions to be made, more variables to consider, and a longer timeline from purchase to possession.

By following the do’s and don’ts outlined in this article, you can confidently navigate the process and make an informed decision.

If you have any questions, or you would like to be added to our presale email list, please call Geoff Jarman at 604-313-7280 or fill out the contact form.

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