Should You Sell Your Preconstruction Condo?

If you purchased a pre-construction condo and it’s now ready for you to take occupancy, you may be wondering if you should sell the condo or move in?

There might be several reasons why you want to sell. Your life circumstances may have changed since you first purchased and a condo no longer fits your needs. Or perhaps the property has appreciated in value significantly since your original purchase and you want to cash in on your investment.

In this post, we’ll explain whether it’s even possible to sell, and if so some of the factors that might affect your decision.

Can & Should you Sell Your Preconstruction Condo?

Many builders will allow you to have an assignment clause in your purchase agreement. This gives you the ability to sell your condo once you are granted occupancy of your unit and before the building is officially registered.

If you don’t have one of these clauses in your purchase agreement, you might be out of luck. In this case, you have to wait until your building is registered before listing.

Even if you have the option to sell under an assignment, it may not be the right thing to do.

Factors to Consider When Deciding Whether to List

Here are a few things that you may want to bear in mind:

1. An Unfinished Building Can Lower the Selling Price

Typically, you are granted occupancy when your unit is completed.  This doesn’t mean that the entire building is fully finished. There could still be work to be done on other units, as well as amenities, hallways, and elevators.

As such, it’s not uncommon for there to be work in progress when you move into a new condo.  Clearly, this isn’t the ideal time for buyers to appreciate the finished product of the building. They may offer you a lower price for the inconvenience of moving in while the building is still under construction.

2. You Will Forfeit Your HST Rebate

If you decide to sell your unit before owning for a minimum of one year, you will forfeit your HST rebate (maximum of $24,000) and you will have to pay HST on the deposit that you have already given the builder.

3. There May Be Lots of Units for Sale

Many people may be in a similar position to you. They have been waiting to gain occupancy and are considering putting their condos up for sale. If everyone decides to sell as soon as they’re granted occupancy, there will be a surge in the number of units listed in your building. The basic premise of supply and demand means that this could lower the selling price of your unit.

So Should You Sell Your Preconstruction Condo?

If your lifestyle and situation has changed, for example, your family has expanded, then it might be simply impractical to move into a condo. In this case, selling so you can buy something different would likely be the best option.

Of course, you may simply want to take the profits and look for another investment. There’s a unique opportunity in the market right now where condos have increased in value significantly and at a faster pace than detached homes. It may be an opportunity for you to cash in and jump into the detached home market while the balance is in your favor. Even with the factors we’ve mentioned above in play, it could still be a smart financial move.

If you’re having trouble deciding whether or not to sell your preconstruction condo, we’re here to help. Your ThompsonSells team is always ready to start a conversation and to offer support every step of the way.