Open the Georgia Strait or any other local paper and you’ll notice advertisements for apartments and condos. Most of these places don’t yet exist. Why? Because they are pre-sales!

What is a Pre-Sale?

A pre-sale is when a Developer sells a Buyer a property before that property is built or completed. The Buyer purchasing the pre-sales is buying the right to a completed property that will be built in future. In the UK and elsewhere Pre-Sales are referred to as Off Plan Investments.

Why do people buy Pre-Sales?

Pre-sales are popular with investors and other Buyers because it allows these Buyers to have the benefit of increasing prices without having to pay a mortgage, property taxes, maintenance fees, or deal with troublesome tenants. Pre-Sales also allow owner occupiers the ability to customize the property they buy.

Are Pre-Sales Safe?

In the Province of British Columbia, Pre-Sales are regulated by the Real Estate Development Marketing Act and are generally safe when you are buying from a reputable Developer. If you have concerns or questions about the Developer, contact the Home Owner Protection Office.

3 Important Facts about Pre-Sales

1. The Purchaser of a Pre-Sale has the right to walk away from the contract to purchase the property for any reason for 7 days after there is an accepted offer. This a BC Provincial Law and its called the “7 Day Rescission Period” If you can’t get financing, if your mother says its a bad idea, if you have a nightmare about Real Estate – YOU CAN KILL THE DEAL FOR ANY REASON!
2. All deposits paid by the Buyer of a Pre-Sale are held in a lawyers trust account. This money stays in the account until the building is either built or the Developer fails to meet the time deadline to have the building built. The Developer cannot use this money and does not have access to this money until the building is complete. If the Developer goes under, the money in the trust account is not part of the bankruptcy and has to be returned to the Buyer.
3. The Disclosure Statement will have all of the important info about the property you are buying such as the size of your suite, what will be included in the suite, and what the building will look like. Make sure you read it!

Check out my list of Vancouver Presale Condos if you’re interested in buying on one of these real estate investments.

If you have any questions on Pre- Sales feel free to contact me at any time.

I would love to hear your thoughts, and questions down below in the form of a written comment.

Thanks!

Hi All,

I have been getting A LOT of questions about The British Columbia Government’s new Harmonized Sales Tax and how it will affect Vancouver Real Estate.

4 Quick Facts on BC’s proposed new 12% HST effective July 1, 2010:

1. It only applies to BRAND NEW properties and is paid when the property completes at the Land Titles Office.  The HST is NOT PAYABLE on re-sale properties or used properties.
2. Increase in the maximum threshold for rebates on HST from $400,000 to $525,000;
3. The maximum rebate will be increased to $26,250;
4. Transitional rules will apply – if you enter a contract before November 18, 2009, but complete after July 1, 2010, the provincial portion of HST will not be payable.  This means you will pay only 5% GST, as you do today.

I’ve included the Press Releases from the BC Gov’t below.

If you’re buying a Pre-Sale, and Assignment, or a Property that is completing after July 1, 2009 and you think HST may be payable – SPEAK TO YOUR ACCOUNTANT AND YOUR LAWYER!

If you have any questions on the HST please contact me or leave a comment down below.

HST New Housing Rebates

BC HST 2009 November Housing Threshold

Looking for an HST Calculator? Check out this great video blog post on a PTT/HST Calculator!