What is a pre-sale?
A pre-sale home is a home that is available to purchase prior to being move-in ready. You can purchase either before construction start or during construction.
It boggles my mind when I meet Buyers who prefer to buy a pre-sale unit straight from the Developer! Not only does this put the Buyer at risk, but it could also mean the difference between appreciation and losing money on your pre-sale property! Here are key reasons why you should employe a Realtor for such an important purchase:
1. It's FREE to use a Buyer's Agent!!
Why wouldn't you use a free service, it costs you nothing to employ a Buyer's Agent! For pre-sales, the Developers pay the Buyer's Agent upon completion of the sale, not the Buyer. By having a Buyer's Agent on your side, you'll have someone to help negotiate your contract, review your contract, disclosure statements and amendements, manage your deposit timeline, keep you updated on development progress, and answering any questions and concerns to ensure a smooth process. With someone else to shoulder the stress, you have more time to spend with you family, focus on work, and walk your dog (if you have one!).
2. Reduce costly mistakes and risks with a Buyer's Agent
The sales team who work at the sales presentation centres are employed by the Developer and represent the Developer. They are under contract to represent the best interests of the Developer, not you! Honestly, the Developer's sales team does not want to deal with Buyers directly like answering all your questions about what happens next and or deal with your emotions. They'd much rather work with Realtors whose clients tend to be pre-qualified for a mortgage, better prepared, and can help advertise their pre-sale development to generate even more future sales! Contrary to Buyers believing that sales teams make thousands of $$$$ upon a sale of a unit, these sales teams don't make much per unit and rely on volume sales! With your best interests in mind while practising with a professional standard of ethics, rest assured that you'll be well-protected by your Realtor! Oh, did I mention that in case anything goes sideways, your Realtor would have Errors & Omissions Insurance coverage to further protect you.
3. VIP sales access and knowing the Developers
Did you know that a large percentage or pre-sale units in a new development can sell out before the public grand opening? The Voyce, which is an 81 luxury new condo development on Cambie St across from Queen Elizabeth Park in Vancouver is already 30% sold a week before the public grand opening this Saturday, September 10 (see photo above). Your Realtor can get you early access which allows you to choose your desired floor plan, design schemes, features, within your budget before the public can get access! Your Realtor can also tell you which developers and areas to avoid! I've told a number of my pre-sale Buyers to avoid certain Developers and pre-sale developments due to bad track record, inferior finishes and designs, shoddy construction, constant delays, and undesireable neighbourhoods. The Developer's sales team is obligated to only sell the pre-sale development they work on and nothing else!
4. Due Diligence and knowing what to ask and look for in contracts
In British Columbia, you are typically allowed 7 days to conduct your due diligence on pre-sale property purchase before the contract becomes a firm and legally binding. This is called the recission period. You have 7 days to cancel your contract and get your deposit back if you change your mind on the purchase. It's super important to use this time to ensure you understand the contract, disclosure statements, deposit schedules, etc before removing subjects and locking in your contract. Your Realtor will guide you on what to expect in your contract and disclosure statements and explain to you possible risks, rights of the Developers, and etc that might affect your purchase decision. The typical Buyer would not know what to look for or let alone, even read the contract! The contracts and disclosure statements can range from 30 pages to a whole whopping binder full of pages!
Buyers often think that if they buy direct from the Developer, they can get a better deal. This is NOT TRUE! Chances are, this 'better deal' can easily be negotiated by a Buyer's Agent AND can possibly offer you more value, all while not compromising your contract safety! Let me illustrate with an example: a Buyer of mine was interested in a pre-sale project after a co-worker decided to walk-in to the sales presentation centre a week before and buy a unit for his family. When I went to our appointment with my Buyer, he got the unit he wanted while doing the proper due diligence AND I negotiated over $20,000 worth of add-ins and custom requests for my Buyer. His co-worker? Well, he only got the promo deal that everyone else got and nothing else. Needless to say, my Buyer came up on top for receiving more bang for his buck!
6. Market knowledge - statistics and comparables
If you walk into a sales presentation centre of a Developer and purchase a property, notice how you won't receive any advice on what the market statistics and comparables for the area is like. That's because the sales team will only sell THAT pre-sale project in question at the price point set out by the Developer only. I've told my Buyers that certain developments are overpriced, overrated, or bad investment because well, they are! I've helped my Buyers do a comparative analysis of any home you are considering on purchasing so you can evaluate how it compares with the recent sales and active listings in the neighbourhood before you buy!
7. Access to Realtor's network for resources and assignments
There are so many components to the pre-sale purchase process that you may need to access your Realtor's professional network - mortgage brokers / specialists, inspectors, insurance brokers (home, critical illness, life) - these are folks who are interviewed and vetted by your Realtor to further ensure a smoother purchase process. Should you decide to also 'assign your unit' (sell your pre-sale contract) for whatever reason, you'll want to access your Realtor's partner and client network to ensure you can get that assignment contract sold prior to completion! Since pre-sales typically complete in 1- 4 years in the future, anything can happen - job loss, marriage, divorce, growing family, moving away, etc.... there's a myriad of different reasons why someone would need to assign a pre-sale contract!
Hope these are some reasons worthy of your consideration to hire a Realtor to assist you with your pre-sale purchase! I would want nothing more than to know that you took the appropriate steps to protect yourself in possibly the most expensive transaction of your life!!!