It’s not news that buying a home in Vancouver has never been more challenging. Not only is affordability an ongoing issue, but buyers are currently experiencing a 25 year low in availability, with demand for homes far outstripping availability. Currently Vancouver is experiencing an ultra competitive, fast-moving market cycle, creating the conditions for a sellers market. While conditions that drive prices up and result in a high interest-to-availability situation benefit sellers, buyers are finding it increasingly difficult to find and secure homes.
Just last night in fact, I was involved in an intense negotiation for a client who was selling a detached home. With nine competing and widely different offers, each with varying factors to consider such as move-in dates and subjects. While one competitive, attractive offer was successful, eight other house hunters left empty handed, back to the hunt.
In our highly competitive local marketplace, where most homes and condos are seeing multiple offers and selling over asking price, the presale environment offers home buyers the ability to purchase without the same level of competition.
Let’s stop there for a moment just to clarify what a “presale” is. Real Estate developers and their sales & marketing teams use the term “presale” to classify a home that is available for purchase prior to being ready for occupancy, usually during the preconstruction or construction phase. If any homes in the development are still available once they’re move-in ready they’re then called “new” homes. Confusing!
Presale homes were a new concept in Vancouver in the early high-rise condo boom of the 1990s, when buildings started to sell out prior to being completed.
Compared with the frenzied approach to buying a home listed in the MLS system, buying at presale offers a seamless hassle-free experience. No multiple offers, no stressing about whether you’ll “win”,. no need to incentivize sellers by submitting complicated subject-free or cash offers that can cause a lot of stress or lead buyers to stretch beyond their ideal price in order to succeed. In addition to simplifying the purchasing process, presale purchases include a standard seven day recision period, where you can cancel your offer if necessary.
Some other advantages to buying at presale include:
- Selection: you’ll have the most selection early in the offering when the bulk of floorpans are released
- Personalization: choose the finishes and details that you prefer, with developers offering multiple options for colour schemes, flooring, appliances, cabinetry and more
- Financial planning: deposits are made according to a schedule meaning you’ll have smaller injections of capital with clearly defined deadlines, allowing you to save (great for first time home buyers) or use funds for other investments in the interim. Additionally, mortgage payments don’t start until you move-in, again great for first time home buyers or those interested in generating positive rental income from their presale.
- Lift: the opportunity to invest early allows buyers the potential of appreciation by the time of completion
- Security: presale properties generally come with the benefit of standard 2-5-10 year warranty
- Newness: really, is there anything better than a brand-new, move-in ready home?
- Community: many presale developments include communal amenities such as rooftop patios, gym facilities, playgrounds and more, not to mention they often incorporate a retail, dining or entertainment element, meaning you have everything you need at your doorstep.
Things to consider when buying a presale property:
- Timing: consider when you would like to be in your new property. If a longer lead time works for you, advantages of buying presale can be greatest when purchased early in the preconstruction phase, often 2-3 years ahead of completion
- High demand locations: presales along rapid transit lines or in “energy centres” clustered around key skytrain stations are seeing consistent levels of interest.
- Bring your trusted advisor in early. The right realtor will help you gain early access which can make all the difference in selecting the home you want, keep you from waiting in opening-day lines and ensure you have access to any developer incentives. Additionally they can help you to negotiate any special inclusions such as parking, storage or developer upgrades.
I’ve been working with key presale developers and leading marketers for nearly 20 years, and with my team, have helped thousands of happy clients find the right investment or dream home. I myself have invested in many presale properties over the years, and benefit as well from working with rennie, the premier marketer of presale properties in Vancouver, where I lead a team of presale experts as well as balance a client base of buyers and sellers looking outside the presale environment. What do I currently have my eye on?
Two of my favourite presales are:
- Ellsworth: a stunning boutique building at Main St & East 7th, in sought-after Mount Pleasant. Sales launch soon, and this one will go fast, with 89 studio, 1, 2 and 3 bedroom homes, a communal 3,500 square foot rooftop patio and a prime location.
- Amazing Brentwood: an incredible master planned community built around a stunning world-class shopping, dining and entertainment complex, right on the Skytrain and just 20 minutes from Vancouver in the heart of the Brentwood District. Tower three currently has fewer than 30 homes left after launching with 526 a few months ago. There have already been significant gains for buyers in the previous two towers, One and Two, still also under construction.
If you’d like to discuss presale opportunities give me a call at 778-917-6889 or email me at rtanzola@rennie.com.
