After years of being in the real estate industry, Costas Kivelos, Founder of First Access Condos, outlines ten common mistakes to avoid when buying pre-construction condos.
These mistakes include basing the purchase decision on personal living preferences rather than investment potential, fixating on past project pricing instead of seizing current opportunities, focusing on trivial details and more. By avoiding these pitfalls, investors can maximize their investment potential and make informed decisions in the pre-construction condo market.
10. Avoid Buying Where You Would Live
Avoid the common mistake of basing your decision to buy a pre-construction condo on whether you would personally live in it. Instead, it’s crucial to focus on understanding the community and the investment opportunities it presents. Consider factors such as the community’s economic and socioeconomic impacts, accessibility to transit, employment prospects, and overall development potential. By looking at the big picture and setting aside personal preferences, investors can maximize their investment potential. It’s essential to prioritize the growth potential and opportunities within the community rather than personal living preferences when considering pre-construction condos.
Costas explains, “It’s important to take a step back, set aside your personal thoughts and think about the big picture in order to maximize your investment.”
9. Don’t Focus on the Past
Avoid the common mistake of fixating on past project pricing when considering pre-construction condos. It’s crucial to focus on the present and seize the opportunity at hand rather than dwelling on missed opportunities. Waiting for the perfect moment will only lead to ongoing regrets and missed chances.
“Embrace the “Carpe Diem” mindset and take advantage of the current opportunity,” says Costas.
If you keep worrying about missed opportunities, you’ll continue to miss out on future ones as well. Don’t let indecision hold you back from making a move.
8. Don’t Focus on Trivial Details
Avoid the common mistake of fixating on small details such as maintenance fees and the location of elevators when considering pre-construction condos. In the current market, these factors have minimal long-term impact as pricing is generally consistent across large condo buildings. Changes in these costs are unlikely at the time of closing for buildings with over 180 units. To maximize investment potential, it is more beneficial to prioritize the price-per-square foot rather than getting caught up in trivial details like elevator location.
7. Don’t Miss Out Due to Launch Date Changes
Investors should not avoid purchasing pre-construction condos simply because the launch date has changed. The process of launching a project involves many complex factors that need to align perfectly. These projects have a limited window of three to four weeks to generate significant interest and sales. Therefore, it is crucial for developers to be fully prepared before they launch. Investors should not be discouraged or concerned about this delay. Instead, they should remain optimistic as the projects will eventually be released, even if the exact timing is uncertain.
6. Avoid Using Resale Contacts
Investors should avoid relying on resale contacts, such as lawyers and mortgage brokers, when dealing with pre-construction condos. Inexperienced lawyers, especially older ones who have not dealt with pre-construction projects before, can potentially harm the investor’s deal. These lawyers may lack the knowledge and understanding required to effectively negotiate and comment on the contract. As a result, they may charge excessive fees for reviewing unfamiliar contracts and make unreasonable requests that are unlikely to be fulfilled. This can create fear and doubt in the buyer’s mind, which is not ideal. It is advisable to work with lawyers who specialize in pre-construction projects and are familiar with the current real estate market environment.
Similarly, working with a mortgage broker who specializes in pre-construction projects will ensure a smoother process as they understand the specific requirements and challenges associated with
pre-construction financing, avoiding unnecessary back-and-forth and providing valuable guidance.