The Great Debate - Pre-sale vs. Resale

If you're purchasing a condo, you'll have two options to consider: pre-sale and resale. Pre-sale real estate is a home or unit a buyer can purchase prior to it being ready for moving in, meaning it's either not built yet or under construction. Resale real estate refers to any existing home or unit that an individual owner has purchased previously and is now reselling. Depending on your needs and financial state, you may be better suited for one more than the other. Here are the key differences to know before making any purchase decisions.

Starting a mortgage
One of the largest differences between pre-sale and resale is the start date of a mortgage. The deposit of a home is paid when a contract is signed; however, mortgages start on the completion date. For example, if the completion date of a pre-sale condo isn’t until fall of 2022, the mortgage won’t start until then. The completion date of a resale condo usually occurs much sooner – and so does a mortgage.

New vs. older
Purchasing a pre-sale means starting with a clean slate in a brand new home or condo. You’ll be the first homeowner in a pre-sale home. When buying a resale, it may be beneficial to evaluate the year it was built, the condition of the home, natural wear and tear in the home, including if appliances need to be replaced, or other renovation considerations.

Due diligence
When considering purchasing a pre-sale home, you can’t walk through to see, touch, and feel the exact unit you're buying, it’s a good idea to research the developer and visit the presentation centre to learn as much as you can about the new community. While it’s still important to know the reputation of a developer for a resale, the advantage is in the ability to walk through an existing space and physically see and feel the condo’s quality.

Completion date
From the time the decision is made to purchase a pre-sale condo, a community can take three years or more to complete. If you have a suitable home in the meantime, this may work to your advantage, especially if you don’t plan on starting a mortgage right away. If you need to move right away, resales work to your advantage.

Suite upgrades
Some developers will allow custom upgrades when purchasing a pre-sale, especially if construction hasn’t started. Common upgrades include changes into interior design or hardwood throughout a condo to replace carpet. Your real estate advisor can help look into these upgrades opportunities. In the resale market, in older condos, simple suite upgrades can increase a condo’s value and can see a good return on investment.

Grandfathered strata clauses
If strata rules change after a council is formed, changes would not affect those who purchased from a developer in the pre-sale stage. These changes often include rental or pet restrictions, like the number of rental suites in the building or the size or weight of a pet. These new rules wouldn’t apply to those who purchased in the pre-sale stage, but would affect those who purchased a resale condominium.

Looking for insight on pre-sale and resale condominiums? Our rennie advisors specialize in every neighbourhood across the Lower Mainland and can help you find the home best suited to your needs.

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Joanne Hoekstra