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How do pre construction condos work

Pre-construction condos are units that are sold by developers before the actual construction is completed. Here's a general overview of how the process typically works:

1. Planning and Announcement: Developers identify a piece of land for a new condo project. They create plans and designs for the building, including the number of units, amenities, layouts, and features.

2. Sales Launch: Once the project is designed and approved, developers start marketing the pre-construction condos. They may have a sales center where potential buyers can view models, floor plans, and other details about the project.

3. Reservation or Purchase: Interested buyers can reserve a unit by paying a reservation fee. This fee holds the unit until the buyer signs a purchase agreement.

4. Signing the Agreement: Buyers sign a purchase agreement that outlines the terms and conditions of the purchase, including the price, payment schedule, estimated completion date, and other details. This agreement often requires a deposit, which is typically paid in installments over the construction period.

5. Construction Period: Once the necessary number of units are sold, construction begins. During this time, buyers usually receive periodic updates on the progress of construction.

6. Closing: When construction is completed, the condo units are ready for occupancy. Buyers are required to complete the purchase by paying the remaining balance. This may involve securing a mortgage if it wasn't previously arranged. At this stage, buyers can inspect the unit and may have a deficiency walkthrough to note any issues that need to be addressed by the developer.

7. Occupancy and Registration: After closing, the condo is ready for occupancy. However, it might take some time for the building to be officially registered with the municipality and for the title to be transferred to the buyers' names.

8. Move-In and Final Steps: Once the building is registered, buyers receive their title deeds, and they can move into their new condos.

It's important to carefully review the purchase agreement and understand the terms, including cancellation policies, responsibilities of the developer and buyer, potential extra costs, and timelines. Additionally, fluctuations in the real estate market or construction delays might affect the completion date or value of the property.

Before purchasing a pre-construction condo, it's advisable to conduct thorough research, understand the reputation of the developer, review similar projects they've completed, and consider seeking advice from a real estate lawyer or consultant.

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