Be careful when buying pre-construction

Construction site

Construction siteI have a lot of clients who purchase homes or condos before ground has broken, intending to move in at the time construction is completed. Sometimes this is a matter of months; sometimes it can be years. The longer the wait between offer and moving, however, the more risk you take on.

The primary concern is that your life could change in the interim. You could lose your job, or your spouse could lose their job, meaning you no longer qualify for a mortgage. You could get divorced and no longer be able to make the payments. You could get transferred to a new city, and no longer qualify for HST rebates since you will not be living there, increasing the purchase price significantly and potentially out of your ability to buy.

If you are buying with an extremely long closing date, you will always want to ensure that you have the ability to sell the contract to someone else so that you don’t risk losing your deposits. Having it reviewed by a lawyer is essential in this case.