Marina Homes

Toronto’s Definitive Guide to Buying a House during Pre-Construction

What is a pre-constructed house?

A pre-constructed or pre-construction house is a residential property purchased before it is built or completed.


This means the buyer commits to purchasing the property based on the developer or builder’s plans, designs, and specifications. In some cases, the buyer may have the opportunity to customize certain features or finishes of the house during construction. Once the building is complete, the buyer takes ownership of the property and can move in or rent it out.


Although you may have yet to consider buying a house in the pre-construction phase, there are numerous advantages.


These benefits include cost savings and earning a significant return on investment when you sell your home, the ability to customize your living space, the convenience of moving into a brand-new house, and more.

How does it benefit you?

Buying a home during the pre-construction phase can offer several advantages, such as:

  • A lower down payment

The possibility of a lower down payment and potential appreciation of your home’s value over time.


By purchasing at current prices, you may benefit from future increases in your home’s value. 

  • Less Expensive

New homes are frequently constructed in less expensive suburban areas, allowing you to avoid high costs and bidding wars that may occur in pricier urban centers like Toronto, Vancouver, and Montreal.


Additionally, if you need to be in a solid financial position, buying a new home during pre-construction can give you the time necessary to improve your financial situation. In contrast, your home is being built before financing is required. 

  • More living space

Newly built homes may offer more living space and be situated on more significant properties than older, existing homes.


Purchasing a house during the pre-construction phase offers the advantage of customization, allowing you to have your home built to your exact specifications. By tailoring your home to your needs, you can increase its value while distinguishing it from your neighbors’ homes, ultimately avoiding costly renovations in the future. 

  • Contemporary Styling

Your home can be painted with your preferred color palette, include desired finishes, and have the appliances you want, saving you both time and money since the work is done for you. New homes feature contemporary styles such as open floor plans, larger eat-in kitchens, and walk-in closets.

  • Latest Technology

Newly built homes and condos also come equipped with the latest technology, including alarm systems, speaker systems, internet, and cable wiring, which can save money and prevent damage to your walls. Financially, new properties require less maintenance since they come with brand-new appliances, plumbing, heating, air, and electrical systems, potentially avoiding repairs for several years. 

  • Lower utility bills

New construction materials can also help ensure energy efficiency, lowering utility bills. However, there are potential drawbacks to buying pre-construction or new-construction homes that you should be aware of before making a purchase.

Steps involved in buying a pre-construction house in GTA?

Acquiring a pre-construction house involves steps that can vary depending on the agent, broker, or developer you work with. Nonetheless, the following steps provide a general outline of the basic process:


  1. Find a good agent or broker

    To begin your pre-construction house search, finding a trustworthy agent or broker with experience in pre-construction and new construction is crucial. While model homes in developments can provide an idea of the final product, the agents staffing these models typically have a relationship with the builder or developer and represent their interests as seller’s agents.


    Their primary responsibility is to ensure that the builder or developer obtains the highest possible price for the homes they sell rather than acting in the buyer’s best interest. Therefore, having your agent or broker who can represent your interests as the buyer is essential. You should look for an agent or broker you like and feel comfortable working with.

  2. Find out about the builder’s/developer’s completion records

    Suppose you have found a pre-construction project that catches your interest. In that case, conducting thorough research on the builder’s reputation and track record of completing tasks is crucial before deciding to purchase one of their homes. To investigate the builder’s reputation, you can visit one of their previous developments and speak with homeowners, search online for reviews, testimonials, and news related to the builder and their past projects. It is essential to remember that some builders have had both satisfied and unsatisfied clients.


    When researching, you should look for trends in reviews and news regarding their previous projects and ensure that your concerns are covered in the purchase agreement documents. You can also ask your agent if they have worked with the builder and know their reputation. Additionally, you can visit local home builders’ websites, such as the Building Industry and Land Development Association (BILD) website in the Greater Toronto Area.


  3. Learn about your new potential neighborhood

    If you are considering purchasing a pre-construction house, scheduling a visit to the home and project sites is essential. These visits are important because they provide an opportunity to get a sense of what living in your potential new neighborhood would be like and gauge the proximity of essential services such as schools, shopping centers, and more.


    During these visits, you should also ask about any plans for commercial expansion in the area, such as the construction or expansion of retail centers and additional residential development. Being informed about future development plans can help make an informed decision about purchasing a pre-construction home.

  4. Visit a model home for an idea

    During your visit to a pre-construction development, it is likely that you will be shown a high-end model home. While these model homes are impressive, it’s crucial to remember that many of the features and amenities you see may be upgrades that come at an additional cost. Additionally, the finishes and fixtures of the model home may not necessarily represent what comes standard in a home.


    It’s important to ask if primary model homes are available to view, so you can have a more accurate representation of what you will be getting for your money.

  5. Negotiate effectively, but don’t push it

    Once you have found a home you are interested in, the negotiation process can be an enjoyable experience if that is something you like to do. However, if you prefer to avoid negotiating, your real estate agent or broker can assist you. It is important to remember that builders and developers are not typically eager to lower their prices since doing so might set a precedent for future negotiations. While negotiating the base price of your home is possible, there are other creative ways to deal, such as asking for discounts on upgrades or other items.


  6. Read the contract carefully and get everything in writing

    It is crucial to sign documents once all terms and conditions have been negotiated, agreed upon, and included in the contract. This is especially important when purchasing a pre-constructed or under-construction home. The contract should clearly outline how the construction will be completed, the consequences of construction delays or cancellation of the project, deadlines for crucial decisions, and payment schedules.


    Additionally, it is advisable to have the builder or developer specify the Homeowner’s Association fees and any other applicable fees in the purchase agreement.

  7. Find out what the warranty covers

    Ensuring your purchase agreement includes a specified completion date is essential when purchasing a pre-constructed house. However, the builder may include provisions that make the completion date dependent on outside factors such as permit approvals or material availability. Additionally, if you cannot close on time due to issues with your lender, you may be responsible for additional fees. Ask your agent about possible delays and negotiate a guarantee if the project is canceled.


  8. Sign your Agreement of Purchase and Sale (APS)

    When the time comes to sign the agreement of purchase and sale (APS) for your new home, you should come prepared with a valid government-issued photo ID, such as a passport or driver’s license, and your checkbook. Your real estate agent will guide you through the signing process and address any questions. Remember that the APS is a legally binding document that outlines the terms and conditions of the sale and each party’s responsibilities.


    It’s essential to thoroughly understand the terms and conditions before signing the paper, as it may include substitutions, inclusions, or exclusions you need to be aware of. Additionally, it would be best if you inquired about any milestone payments you might be responsible for and whether you need to pay them at certain stages of construction or, in total, when you receive the keys for final occupancy. APS documents often contain legalese and fine print, so it’s essential to clearly understand everything you agree to before signing.

  9. The ‘cooling off’ period

    To protect homebuyers, there is usually a cooling-off period mandated by law in the APS. This period allows you to back out of the deal before it ends and receive a refund for any payment you have made. During this time, it’s advisable to seek the help of a lawyer who has experience in pre-construction agreements.


    You should also take this time to secure pre-approval for a mortgage or a commitment letter from your financial institution and complete any other important tasks related to the purchase process. The cooling-off period is when your home is reserved for you, and you are fully protected in any emergency. The length of the cooling-off period varies by region and can be around ten days for new home sales in Ontario.

  10. Finding a lender to pre-approve a loan

    To purchase your new home, you must secure pre-approval from a financial institution or obtain a commitment letter if you require a mortgage. Since the house still needs to be completed and registered, the mortgage cannot be officially registered. Therefore, it is advisable to shop around for lenders and choose the one that offers the most competitive rates, regardless of whether they are affiliated with the builder.


Congratulations, you are now one step closer to becoming a homeowner! Your first check will be cashed by your builder/developer after the ‘cooling off’ period has ended.


  1. Your first deposited check will be cashed

    After the cooling-off period, if you are satisfied with the purchase agreement, you can finalize the contract by submitting your first deposit check. The check will be cashed the day after the cooling-off period has ended, as specified in the sales agreement. Your builder/developer will provide you with a receipt for each check that has been cashed. You must ensure that you have sufficient funds in your account on the specified dates to avoid costly Non-Sufficient Funds (NSF) fees and any delays in the purchase process.


  2. Begin customizing your home

    During the construction process of your new home, you will have the opportunity to collaborate with a representative from your builder or developer’s office to customize and design your house. You will choose the colors, finishes, and upgrades that align with your vision and create the home of your dreams.


  3. Inspect your new place

    To ensure that your new home meets the agreed-upon standards, you must have it inspected before transferring ownership. This inspection is mandatory for all new homes under warranty and is conducted by the builder shortly before the house is delivered.


    During the inspection, you will verify that the builder has fulfilled the promises outlined in the purchase agreement. Any defects discovered should be recorded on a list and acknowledged by the builder’s signature. This written acknowledgment ensures that the builder is aware of the issues and is responsible for resolving them. With the builder’s signature, they are legally obligated to fix any problems.

  4. Be wary of the deadlines for warranty claims

    To ensure that your home is in good condition and that any defects are addressed, a second inspection is recommended approximately a month before your home warranty expires. This allows for enough time for any potential issues to arise and for necessary repairs to be made. Remember those warranty claim deadlines vary, so it’s important to mark these dates on your calendar and submit any claims at least five days before they expire.


    As the homeowner, it is your responsibility to maintain the validity of the warranty. This means that you should document any repairs or maintenance that you have performed, such as changing your furnace filter or cleaning your gutters.


    Additionally, your builder should provide copies of the manufacturer’s warranties for the components used in your home.

Are you ready to move into your new place? There are two critical dates and stages during this closing process! Here’s what you need to know.

  1. Interim and Final Occupancy

    The closing process for purchasing a new home consists of two essential stages – Interim Occupancy and Final Closing. You will meet with your lawyer and real estate agent/broker during these stages to finalizing the purchase.


    When your builder/developer informs you that your home is ready for Interim Occupancy, you will meet with your lawyer to make any outstanding deposits and occupancy fee payments. It is important to note that you do not yet own your house during this stage, and your mortgage or final payments will not occur until the Final Registration date. To avoid paying increased interest rates, it is recommended that you contact your lender about one year before your anticipated occupancy date to have your mortgage letter updated.


    After the Final Closing date, you will meet with your lawyer for a second time to sign all of the documents to transfer ownership of your house from the builder/developer to you. During this meeting, your mortgage will begin, and your lawyer will explain any outstanding costs you will be responsible for paying to finalize the purchase.


Congratulations! After completing all necessary paperwork and paying any outstanding fees and deposits, you are now the official owner of your new home.


There are several factors to consider when making important decisions, like purchasing a new home, particularly during the pre-construction phase. These include but are not limited to taxes, the anticipated completion timeframe, your reasons for buying a home, and other essential considerations.


Purchasing a home during pre-construction has risks, and investing in real estate is inherently risky. However, if you do your research, negotiate well, and are prepared for the trials and tribulations buying a house during pre-construction can present, your investment might turn out well for you.


Marina Homes is widely recognized for its unwavering commitment to building top-quality communities that continuously grow and evolve alongside their residents. At MH, we understand that being part of a community goes beyond just ‘finding a place to live’. We know how a great community can significantly impact one’s family life, education, friendships, and overall well-being.


By combining the highest quality materials, exceptional design, signature finishes and outstanding craftsmanship, Marina Homes creates homes that are not only beautiful but also built to last. These homes are a testament to the company’s dedication to providing unparalleled living experiences for its residents. With Marina Homes, residents can rest assured that they are living in a community that values their needs and aspirations. We are committed to creating neighborhoods that foster a sense of belonging, where families can create memories that will last a lifetime.


If you are looking for the permanence of comfort, style and longevity, look no further than Marina Homes.