How to Successfully Buy Preconstruction Condos in Toronto

Oct 3, 2020 | Pre-construction Condos, Toronto

How to Successfully Buy Preconstruction Condos in Toronto

Developers are known to play a little game when setting up for their initial launching of the pre-construction condo project and one very important piece of information is… the developer does the launch in generally five different stages

Developers Dilemma

Did you know that developers cannot move forward with obtaining their OWN financing for construction until they sell at least 75% of the units? This is just one of many bits of vital information that you should know how to successfully buy pre-construction condos in Toronto!

This is a key point as to why the price tag on a pre-construction unit is lower than at the time that the condo is completely built, and units go up for sale. This is also why a buyer only needs a good down payment to secure a unit in a preconstruction condo without having to flip the mortgage loan too…that can wait until the condo is completed.

Developers are known to play a little game when setting up for their initial launching of the condo project and one very important piece of information is…the developer does the launch in generally five different stages. As you may have already guessed, the best and most desired units are the top picks for buyers and the method for early sales usually runs as so:

Toronto Real Estate
  • Preference buyers (developers tend to let family & friends have first pick of units)
  • A ‘Platinum’ Launch (a select group of top agents are invited to work with the developer for the best prices)
  • The Launch for VIP’s (a few hundred real estate agents are invited to help sell remaining units)
  • All Agents In (any agents can now help sell the remaining units)
  • Opening for the public (anyone can make an offer on the remaining units)
  • Bend It to Your Favor 
Condo Building Under Construction

First Buyers Are Getting The Best Prices For Condos

Now that you know that the first buyers in usually gets the best prices and at the public opening, units are priced higher and are less desirable then, say, the top floor(s) units. If you can at least get in with your realtor at the Platinum launch or the VIP launch, you have a much better chance of saving some substantial money (timing could be everything and could cost you a difference of $100,000)!

Location sometimes has to do with essential timing and pricing on pre-construction condos; in other words, the location could dictate the starting pricing (which could be set higher) and then lower, staying consistent for the remaining launch stages. This basically means you could pay a much higher price then someone that came in a little later for the exact same unit size & style.

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The Realtor & Developer Relationship

Knowing how to successfully buy pre-construction condos in Toronto is to know upfront that developers and realty agents & brokers have a unique relationship that benefits them both. During a Platinum launch, the developer basically opens their roll-a-dex and plucks out their top realty contenders for the Platinum launch, which benefits the ‘Platinum’ realtor and the developer for a quicker/secure unit sale.
The Platinum realtors have an excellent track record of working directly with developers, sell many units for them and expect the developers to call them up when a new development is approved for construction to further pre-sell units. This relationship does save the developer money…but how?

Developers could spend a small fortune if they skipped the second, third and fourth stages of the launch and went straight to the public after the first stage and it is this that lends to the attraction of directly using real estate agents and realtors to push the preconstruction suites & units. Sure, developers must worry about realtors & agents/brokers commissions, but it is less work and less money for the developer to create relationships with realtors.
It is the real estate agents, brokers and realtors that shoulder the major costs involved when promoting a preconstruction condo. The developers respect this expense, and THEREFORE the developer protects the realtors and gives them the earliest chance to sell units.

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Time Equals Money in Pre-construction

Not every investor ‘gets it right’ because they either jumped too quickly on a preconstruction condo or they waited too long to make their move. You have already learned some highly valuable information that can be a big help when deciding on an investment in condominiums on the verge of construction commencing.
Realtors, real estate agents and brokers get the inside scoop on preconstruction condos in Toronto long before the public is made aware of them…so tip # 1 is to secure a Platinum realtor if possible, and if not, a reputable realtor to work on your behalf.
Guess what? If a developer does not hit their 75% sold margin to obtain financing for their construction loans, then they have to ‘sweeten the deal’ by offering better terms & prices on units, which of course is not advertised and only ‘whispered’ to a select few realtors!
Buying low provides the ideal option to sell high and isn’t that the point of being an investor? Many people will buy a condominium unit and at some point, down the road, sell it for whatever reason (so wouldn’t it be nice if there was a healthy profit)?

Platinum Agents Leg-Up

Let’s face it, Platinum agents are the go-to realtors when it comes to successfully buying preconstruction condos in Toronto for a wide swath of reasons:

  • They are the first realtors that developers turn to because of their abilities to sell large volumes of condos
  • These agents are a powerful force within social media outlets and are marketing wizards
  • They have sizable budgets for marketing & selling
  • They can get in on a preconstruction condo on behalf of their clients and get the best pricing/unit for their clients
  • These agents gain priority & sometimes unit incentives over all other agents in the real estate industry
  • Platinum agents can secure desirable suites & units faster for their clients

When the developer and sales team favor Platinum agents over all other real estate agents & brokers, it does make a huge difference when a condo buyer wants to get into a pre-construction condo strategically and save money along the way!

Check also

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