How Do Deposits Work When Buying Pre-Construction Condos

//How Do Deposits Work When Buying Pre-Construction Condos

How Do Deposits Work When Buying Pre-Construction Condos

Financing works a bit differently when purchasing a pre-construction condo compared to buying resale. Generally speaking, you need a down payment of 20% to secure your unit.
A condo selling for $500,000 in Toronto requires a deposit of $100K. Some investors may not have $100K available at once. The good news is condo developers offer a more approachable path to those willing to buy pre-construction condo. A typical arrangement breaks that 20% deposit into installments paid over the construction period with a final payment at occupancy.
Although every contract is different, the deposit structure may be as follows:
This makes a total of 20% of the purchase price. Upon the condominium finishing construction and the Agreement of Purchase and Sale being completed, the mortgage on the new unit would now be the remaining 80% of purchase price.
5% at occupancy

5% of the purchase price within 365 days

5% of the purchase price within 120 days

5% of the purchase price minus the initial deposit within 30 days

$5,000 with the offer

By | 2018-09-09T16:54:08+00:00 July 25th, 2018|Uncategorized|0 Comments

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