How to buy real estate without qualifying and unravelling the Appeal of Presale Properties in Vancouver

How to buy real estate without qualifying and unravelling the Appeal of Presale Properties in Vancouver

What Exactly is a Presale?
A presale refers to acquiring a property even before its construction commences.

Is a Mortgage Essential for a Presale?
Not necessarily. Yet, it’s always good to know where you stand financially.

One tactic gaining traction is purchasing a long-completion presale without any intention of completion and instead opting for an assignment sale.

Decoding Assignment Sale:
Imagine selling your promise rather than the actual property. It means you contracted to buy a property, and later, you pass on that contract to another buyer without seeing it through to completion.

When venturing into presales, ensure your contract has a friendly assignment clause. Collaborating with a realtor experienced in presales can be immensely beneficial.

By not involving a realtor in your presale purchase, you might be missing out. Some realtors have exclusive access to developer’s VIP perks:

  • Priority in unit selection.
  • Exclusive incentives and cash-back offers.
  • Lower assignment fees.

Assignment fees can vary, from a fixed rate (like $1,000) to a percentage of the assigned sale price or even a portion of any profit generated from the assignment sale.

Historically, Greater Vancouver‘s property values have doubled approximately every 10 years. With this trend, it’s statistically likely that a 6-year presale will appreciate considerably.

Hypothetical Scenario:
Buy a one-bedroom presale condo in Vancouver for $1,000,000 with a 6-year completion. Based on past trends, that condo might appreciate by $500,000 to $600,000 by its completion date. Even on the conservative side, you’re looking at a potential $250,000 appreciation for just a few hours of commitment.

High budget? Explore affordable options outside Vancouver’s core.

However, I must emphasize: Always research thoroughly before venturing into presale real estate. There are risks, especially if you don’t secure a mortgage approval right away. While such an approval might not hold much weight for a property completing in half a decade, it does provide a sense of your current financial standing.

Pros of Presale:
The deposit structure can be advantageous. Instead of an immediate 20% deposit, you might spread it over several years. Some deals might even offer a total deposit of 10%, split over two payments!

What About the Risks?
The real estate market is volatile. Prices might fall, leaving you to bridge the gap. If a developer defaults, your investment becomes a missed opportunity, even if you get a refund. And if you can’t secure a mortgage upon completion? Private lending could be a temporary solution.

To delve deeper into presale real estate, feel free to reach out. My bestselling book, Rockstar Real Estate Investing, offers more insights into smart property investment.

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Signing off, I’m Jessi Johnson, reminding you to steer your life wisely and make informed property choices!