The answer to whether its better to buy a resale condo versus a preconstruction condo very much depends on your personal situation, your sense of urgency, your level of risk and your lifestyle preferences…. Check out this list of Pros and Cons of Each and then decide whats best for you. Talking it over with a good Realtor can help!

Pros of Buying a Preconstruction Condo:

1. Gives you more time to save for the down payment!

2. Note: There is a payment schedule for each Developer and it looks something like this: 5% in 30 days, 5% in 120 days, 5% in 360 days and 5% in 520 days or on completion).

3. Everything will be brand new and never been lived in before

4. It comes with a Tarion Warranty that covers certain items for up to 7 years.

5. You get to customize certain things (such as appliances, cabinetry, flooring).

Pros of Buying a Resale Condo:

1. You can move in now, assuming you have all the funds in place!

2. What you see is what you get!

3. You can negotiate the price!

4. (Note: A Good realtor can help you with this)

5. Deposit(downpayment) can be as low as 5% of the purchase price

6. (Note: Your mortgage payments monthly will be higher and CMHC insurance is required under 20% deposit

7. There is no HST (13% tax) added to the price (unless you are operating this as a business investment)

Cons of Buying a Preconstruction condo:

1. You are buying from a Floorplan and Description – not easy to visualize.

2. The good floorplans sell fast, so unless you are in early it’s a challenge.

3. The Price is fixed by the Builder (there is generally no negotiation)

4. Prices can be inflated as Builders project the cost 4 years out.

5. The project may be delayed or even called off! (your deposit is returned in that case)

6. Deposit usually adds up to 20 to 25% of the purchase price

7. Occupancy Fees (You are allowed to occupy your unit when it’s ready, but other parts of the building may still be under construction. Until the building is completed and officially registered as a condominium corporation, you pay the builder monthly occupancy fees and you can’t start paying mortgage payments yet, because you don’t officially own it yet!

8. Builders Fees

9. HST (13% tax) is added to the price (You can get this rebated if its your primary residence)

Cons of Buying a Resale Condo:

1. Its not brand new, so you might need to set aside money for renovations.

2. The older the building the more likely problems can arise resulting in higher maintenance fees

3. The good condos sell fast and you need to be well prepared to make your purchase

4. Sometimes there are mutiple offers and the price goes higher than it should!

Hope this helps! Buying Resale generally means you are ready “NOW!” to make that purchase, you have everything saved for your down payment, and you are already approved for a mortgage. Buying a preconstruction condo means you do not need to have all your down payment saved, and you are in a steady job and have a mortgage preapproval.  You are not in a rush and have a good place currently to live while you wait for your dream condo to be built.