Question 1

What is a presale home, and how does it work?

Accepted Answer

A presale is a contract where the buyer agrees to purchase a property before it is constructed. Buyers can secure a unit by signing a contract with the developer and making a deposit (10%-20%) as per the deposit structure decided by the developer. The buyers pay the remaining balance and take ownership after the building construction is completed. 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.

Typically, presale is associated with a new condo development or a new townhome development. Some developers also offer pre-sale opportunities for single-family homes, row houses, and duplexes. Almost all presale properties have a monthly strata fee.

Question 2

What are the benefits of buying a pre-sale property in BC?

Accepted Answer

Presale properties offer several advantages, including price appreciation, extended payment terms, and the option to customize certain home features. Considering the market trends of BC properties, a pre-sale property often appreciates during the construction period of 2 to 4 years. Buyers can plan for their home purchase, secure mortgage approval in advance, and prepare for mortgage payments. Buyers also benefit from new home warranties. Additionally, first-time homebuyers may qualify for government incentives and property transfer tax exemptions.

Question 3

How do deposits and payments work for presale homes?

Accepted Answer

Presale homes require a total deposit of typically 10% to 20% for condo development and 10% for townhome development. An initial deposit at the time of contract signing, followed by scheduled deposit payments over several months. Sometimes, the developer promotes booking a home with as low as a 5% deposit only. The agreed-upon deposit structure becomes a part of the contract. All deposits are held in a lawyer’s trust account unless deposit protection insurance is obtained, in which case the deposits may be released to the developer. The remaining balance is due upon completion of the development. The buyer becomes the registered owner of the home. Typically, the developers set their deposit structures, so please review the contract details carefully with your real estate agent.

Question 4

How can I secure FIRST access to new construction homes?

Accepted Answer

Getting first access to new construction homes comes with huge advantages - early pricing, the best unit selection, and exclusive incentives before they’re available to the public.

Many Agents registered on Listings Nearby have FIRST access to pre-construction projects across BC. That means their clients get in first, securing the best deals before other buyers and most of the realtors.

Want to be on that list? Sign up and connect with Agents with early access to the hottest new developments in the Lower Mainland and across BC!

Question 5

Why do I need a Real Estate Agent to represent me in a pre-sale purchase?

Accepted Answer

Buying a presale property is a big investment. You can make a huge difference by having a real estate agent represent you:

1. Presale contracts are complex and often favor developers. A presale specialist will help you understand key terms like disclosure statement, pre-sale contract and clauses, amendments, deposit structures, assignment terms and fee, completion dates, rescission period, breach of contract, and other costs.
 2. Some agents with expertise in the presale niche receive first access to pre-construction projects across BC. This allows you to take advantage of early pricing, better unit selection, incentives, etc.
 3. Understand all possible risks that may exist for those considering entering a pre-sale contract. Real estate agents have a fiduciary duty to put the interests of their clients first, so it is crucial to seek their independent advice.
 4. The developer pays the commission to your real estate agent, and you receive expert advice at no extra cost.

Question 6

What is an assignment sale in real estate?

Accepted Answer

An assignment sale occurs when a presale buyer transfers their purchase contract to a new buyer before the completion date. The new buyer (assignee) takes over the contract and completes the purchase. The original purchaser can transfer the contract for any price, including a higher price than they originally paid for the property (known as a lift). Assignments generally occur closer to the completion of the development.

It is mandatory for the original buyer (assignor) to obtain the developer’s permission before assigning the contract unless otherwise stated in the agreement. Additionally, the assignor must secure the developer’s approval after the assignment contract is accepted. The developer may charge an assignment fee, which is typically paid by the assignor. Furthermore, even after the contract is assigned, the original purchaser (assignor) remains liable for its completion if the new buyer (assignee) fails to fulfill their obligations.

If you are looking to assign your presale contract, submit the request form in ‘Assign Your Presale Contract’ section on the home page. We will connect you with our presale specialists. If you are an Agent looking to list your assignment, Sign Up.

Question 7

What are the risks and advantages of buying an assignment property?

Accepted Answer

Advantages:

1. Assignments allow buyers to purchase a nearly completed home and often with lower deposit requirements and below the current market price. 
 2. The original buyer may be motivated to sell quickly. The more you buy closer to the completion date, the better you can negotiate the price.
 3. Buyers may get a chance to buy a home in their preferred developments already sold out.
 4. Since the unit has never been lived in, you get a brand-new home with modern finishes, warranties, and new appliances.
 5. The construction status provides insight into the building layout and offers reassurance that the development will be completed.
 6. Since you’re buying a presale, you get a brand-new home with full 2-5-10 home warranty coverage,

Risks:

1. Buyers must make sure that they will qualify for a mortgage at completion. It’s essential to work with an experienced real estate agent specializing in assignments to navigate the risks, negotiate better terms, and ensure a smooth transaction.
 2. Unlike presale buyers, you may not have the opportunity to choose finishes, upgrades, or make changes to the unit.

Question 8

What government incentives are available for first-time homebuyers in new developments?

Accepted Answer

First-time homebuyers in British Columbia may qualify for several incentives, including:

1. A lower down payment for mortgage approval
 2. Property Transfer Tax (PTT) Exemption for new homes
 3. Tax-free withdrawal from RRSP Home Buyers' Plan (HBP) for a down payment

The Canadian government keeps revising these incentives from time to time, so please consult a professional for the latest updates.

Question 9

How can I find the best pre-sale and assignment deals?

Accepted Answer

Finding the best presale and assignment deals on ListingsNearby.com is easy:

* Search by Map or Search by City & Neighbourhood.
 * Navigate to the search page and explore the Presale or Assignment properties.
 * Use filters like location, home type, price range, sale type, and completion date to find the best deals that match your criteria.

Sign up for VIP access to get early-bird pricing, exclusive incentives, and priority unit selection before public sales.

Many assignment sellers are motivated to sell quickly, which means you can find below-market deals.

Work with an experienced real estate agent specializing in pre-sales and assignments who can negotiate better terms and secure exclusive deals for you.

Question 10

What should I consider before buying a pre-sale or assignment home?

Accepted Answer

Buyers should evaluate developer reputation, deposit structure, contract terms, and potential appreciation before purchasing. Assignment buyers should also review assignment fees, upgrades included, contract terms, closing costs, and mortgage qualification. Working with a knowledgeable real estate agent ensures a smooth and secure transaction.

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