When buying a new Condo in Toronto, you have a few options when it comes to whom you use for help. Navigating the real estate markets and its rules and regulations can be difficult. One of the first things you will need to consider is if you should hire a real estate agent or buy directly from the developer.
There are benefits and drawbacks to both sides of this equation. A lot depends on the development you are buying, your level of experience and the experience of the agent or builder representative you choose.
Here are a few things you should consider when making this decision:
Who has the good connections? Experienced real estate agents will be invited to all the VIP Condo Sales and community events, staying well aware and up-to-date on the latest projects. Plus, they will have relationships with builders and developers, which could lead to negotiated agreements that are beneficial to your best interest. Agents can also often obtain special discounts and identify hidden buying opportunities. They can also often help you analyse data and better predict trends around your search.
Saving money. A good realtor will review their client’s closing agreement and ensure they aren’t being charged for unnecessary items from the developer or builders (e.g. community building fees the city didn’t charge).
Understand floor plans. Agents will be able to point out any small details, such as the location of garbage shoots on your floor. If your condo isn’t built yet, they can take you through the floor plan and fill you in on every detail. Floor plans aren’t the easiest to read, and buyers can often miss small details. Sites such as condonow have great details on condo floor plans.
Familiarity with developer contracts. Realtors will be able to tell you exactly what you’re getting, pointing out any legal clauses that possibly have been issues in the past.
Buying direct from the developer almost always means your buying a pre-construction condo, or in other words a condo that hasn’t been built yet. With pre-construction you are obviously the first owner so you get to customize the purchase. They can often be cheaper than re-sale and you have more time to save for the overall down payment.
However, you’re relying on a floor plan that may look completely different once it’s finished and you may have to pay phantom rent (payments you pay the builder that don’t count toward your mortgage).
The biggest difference when working direct with a developer’s sales rep, is that they represent the building, not you. They may have just been hired by the project and may have very little experience related to your contract or some of the more complicated details of the project.
Whichever route you choose, there are 2 things you should never compromise on:
Research. Research is essential. After all, you’re making a major investment. Research not only the reputation of the builder, but also the developer, potential real estate agents, legal contracts, and what to expect from the home buying experience – positive and negative. You need to be prepared and know how to handle the situation if something happens. Some great examples of comparisons such as this condo comparison for the entertainment district in Toronto can be found here
Seek other legal advice. Seek out legal advice outside of what the developer or home builders recommend. Builders often recommend law firms so they can get to their projects as quickly as possible. But that often leaves you with a 50-page contract you don’t understand, written in their favour. Don’t sign it without going over it with a lawyer – one you seek out personally.
Condo buying is fraught with twists and turns that can be confusing for anyone buying a home, new or seasoned. However, hiring an agent or buying directly from the developer relies ultimately on your specific wants and needs. Do as much research as you can first, so that you’re in a good position to start, regardless of what direction you untimely end up taking.