I don’t actually like condo/apartment living. I much prefer a house, where I can walk into and out of without having to fuss with hallways, security guards, and elevators.
So, I fell in love with a suite last week. It’s on the first floor of a low rise with an outdoor entrance. It’s also pre-construction, with occupancy slated for this Spring, and built by a reputable developer.
The pre-construction thing is good and bad. Good because everything is brand spanking new, with great finishes and in my price range. I would be the first to live in it! But it’s also bad because I don’t understand it.
I didn’t think I would ever consider pre-construction, but this area of Toronto is of interest to me. It’s in Corktown, a sleepy historic district in the east end, near the St Lawrence Market and Distillery district, right on the Queen and King street car lines, near the DVP, and it’s easy for me to access the Yonge line to get to work. The area is developing to accommodate the 2015 Pan-Am games.
When I asked my realtor to find me something in that development in my price range, I didn’t think he would actually find it. But, he did! So then I was seriously considering it.
The next day, I decided to visit the sales centre on my own to talk to someone directly. But before I went, I called my lawyer. I know a little bit about pre-construction, but have never focussed on it and just wanted some direction.
My lawyer was great! She chatted with me about it for free, and basically advised me not to buy it. She knew I was on my way and gave me some great questions to ask. I would need to show her the Agreement of Purchase and Sale with a Schedule of Additional Closing costs. She says if they are willing to give that to me, I can get her to look over it first before signing anything.
So I went in to try to negotiate on my own, whether it was price, incentive packages, whatever. I just wanted to go in there to get my toes wet and to learn something new. I also asked for the documents that my lawyer wanted, but they wouldn’t give me anything except for their shiny marketing materials. The only thing I negotiated down was the initial deposit, and they may also give me a discount on green space – none of which helps me.
In the end, I decided to pass on it. There are other development projects in the area, but this building will be the first. Which means not only am I living in a construction zone for the next bunch of years, but also it hinders my re-sale value if I get tired of it and decide to sell. Like who wants my lived-in suite when there are a bunch of new things being built just a few steps away?
I also calculated how much it would be if I paid a years worth of occupancy fee (the rent you pay to the developer before the building is registered – and I used a year as a worse case scenario), which adds an extra chunk to the price. In which case, I ccould just buy something on the resale market in an already established neighbourhood, and start building equity immediately.
I would’ve risked all of these variables if I loved the suite itself. But, it’s basically a 461 sq ft shoe box. I love that it’s on the 1st floor with a direct front entrance, but I’m not sure that’s good for re-sale since other buyers usually prefer higher floors.
If it were a little bigger, or cheaper, or included parking, then it would be worth it to me. But otherwise, nahhh.
It was a good experience though. I had a nice chat with the sales rep, and my lawyer, and my realtor. I’m interested to see how this development unfolds, and whether I’ll later regret my decision to opt out.
That’s kind of exciting on it’s own!
But I really hope the development goes well and am rooting for it. This neighbourhood deserves to be on the radar, and we could all use a fun new district to hang out in the east end.