After being asked recently about the timeline of a pre-sale, it occurred to me that more than one person may be curious on this matter.
For the purpose of this post we're fast forwarding through the sales aspect of buying a pre-sale. We'll pick things up at the point where you've already selected a unit and are ready to write a contract on it.
1) The 7 Day Recision Period
On day one, you'll find yourself in a sales office with a representative from the developer and your Realtor®. In a brief appointment time slot, you'll be whisked through the contract to purchase your chosen home and other paperwork associated with the purchase. It's totally normal to feel overwhelmed during this appointment as developers often rush through things. The important thing to remember here is that you'll have some time to breathe afterwards and digest everything you sign over the following seven days. The recision period is a government mandated week long slot for purchasers to revoke their contract with no penalty.
At the time of writing the contract, developers typically expect a nominal amount, usually between $5,000 - $25,000 depending on their preset deposit structure. If you decide to proceed with your purchase after the recision period, you will be asked to top up your deposit to either 5% or 10% of the purchase price, again depending on the developer's requirements.
2) The First Amendment to the Disclosure Statement
After a few months (usually ranging anywhere from 3 to 9 months), you should receive a document called the "First Amendment to The Disclosure Statement." At the time of your original contract, you would have received a Disclosure Statement. This package outlines every detail about the development including such aspects as how many parking stalls will be in the building, the breakdown of types of homes, amenity spaces, and more. The First Amendment is exactly what it sounds like. It will explain any changes to the Disclosure Statement, and therefore the development that have occurred. In here, you will learn that the developer has secured construction financing, whether or not they had to alter anything due to city or engineering requirements, and more.
The most notable part of receiving this document is that it means your next deposit is due. Again, depending on the deposit structure set out in your contract, this will mean you owe the developer the next 5% or 10% instalment.
3) Second or Further Amendments, and Remaining Deposits
The next time you will hear from the developer is when either your remaining deposit instalments are due, or if there is a second or third amendment. You can expect either of these within 6-12 months of your original contract writing date.
4) Nearing Completion
As your building approaches completion, the developer will get in touch with you about a month before you takeover your new home. At this time, you will have to provide the contact information of the lawyer/notary you will be using to transact the property into your name. As well, you will be offered a date to conduct a new home walkthrough inspection.
5) Walkthrough Inspection Date
Typically one to two weeks prior to your possession date (the date you get your keys), you'll attend a walkthrough of your new home. This will be your first chance to see the nearly-ready property. This also serves the purpose of an inspection and allows you the chance to point out any defects or flaws that you notice and wish for the developer to remedy prior to your move in. Defects can be as simple as clean-ups of certain areas.
6) Conveyancing and Possession
Your new home is finally ready! A few days prior to possession, you'll need to visit your lawyer/notary to finalize the transaction. At this appointment, the property will be registered into your name and your mortgage will kick in.
Lastly, you'll have an appointment time to pick up your keys. At last, highly anticipated day has arrived. What next? Enjoy your brand new home!
And for the commonly asked questions:
How long does the entire process take?
This depends on the builder, type of development, and construction material. You can generally estimate two years for a wood frame building and three to four years for a concrete high-rise.
What do I need to set up when I take possession?
Your home should be mostly ready to go, but you'll need to set utilities and ensure your home is protected. First on the agenda should be home insurance. It's always a good idea to discuss this with an insurance broker to have it activate on the day you obtain your keys. Next up is your utility accounts, likely through BC Hydro and Fortis BC. Depending on your preferences, cable and internet can also be arranged upon move-in. Some developments even offer one year of free service from certain cable/internet providers. Finally, you're going to need some movers to bring your furniture and other belongings over.
Who Do i speak to if I have any questions about my new home?
Your property manager will be your first point of contact regarding anything to do with living in your new home. Should you have any issues with the building, defects in your home, or structure, you'll have a representative from the developer for post-purchase care. Once your building has had the majority of residents move in, a strata council will be formed to represent the overall population of the building. This group will make decisions to ensure your building runs smoothly over the years. All owners are welcome to be part of this committee as well as participate in voting for changes within the building.
If you are considering a pre-sale purchase, I would be happy to guide you through the process. Feel free to email me at adil@adilkhimani.com to learn about the exciting pre-sale opportunities coming to Metro Vancouver throughout 2018.
All the best,
Adil