Buying a pre-sale home, a property purchased before it’s built, can be exciting. You get a brand-new place tailored to your taste, often with time to plan your move and lock in pricing before completion. But it also comes with unique risks and responsibilities that every buyer should understand before signing.
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The Rewards
1. Price Lock-In
One of the biggest draws of pre-sales is locking in today’s price for a future home. If the market rises before completion, you’ve potentially built equity before even moving in.
2. Customization & Modern Design
Buyers often get to choose finishes, layouts, and color schemes, making it feel like a custom home without the hassle of building from scratch.
3. Lower Up-Front Costs
Pre-sales usually require a deposit structure spread over several months, giving you time to save and prepare financially.
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The Risks
1. Market Changes
If the market dips before completion, you may be paying more than the home is worth at closing, and lenders might appraise it lower than your purchase price.
2. Interest Rate Fluctuations
Your mortgage rate isn’t locked until closer to completion, so rising rates can affect your affordability down the line.
3. Developer Delays or Issues
Construction delays are common, and in rare cases, projects can stall or cancel entirely. Always research the developer’s track record.
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Exit Options if You Don’t Want to Complete
Sometimes life changes between purchase and completion. Maybe you move, lose income, or the market shifts. Your options include:
1. Assignment of Contract
You may be able to sell (or “assign”) your contract to another buyer before completion. This depends on your contract terms and developer approval, and assignment fees may apply.
2. Negotiating Extensions or Amendments
In some cases, developers may grant short extensions if financing or personal situations arise.
3. Forfeiting Deposit (Last Resort)
Walking away means losing your deposit and potentially facing legal action if the developer resells for less. Always speak to your realtor and lawyer before considering this route.
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The Bottom Line
Pre-sale homes can be an amazing opportunity, especially in growing markets like Metro Vancouver and the Fraser Valley, but they require careful planning and professional guidance.
Before buying, make sure you understand the contract, the timeline, and your financial position.
As your realtor, I’m always happy to walk through your pre-sale options, help assess risk, and ensure you’re protected every step of the way.
