Pre built condo buying questions

[tariq]

Looking to buy a pre-built condo and had a few questions.

The current scenario:
- construction hasn't started yet
- move in date is supposedly Dec. 2012 or later

1) At what point is the hard contract given? When construction commences? Is this when I need to provide the down payment?

2) Assuming the above is correct, what if I wanted to make additional payments towards the down payment? This even possible? Since they'll be 1-2 years before move in, I was planning to save a lot, but what can I do with this money other than put towards the mortgage after I move in?

3) How would the HBP fit into all this if I wanted to put some towards the down payment? At what point would I withdraw?

4) Should I find my own agent?

Thanks guys.

 

[UrbanVigor]

1) You'll receive a P&S agreement at the time that you sign and make your first deposit. At that time, you will then be committed to a deposit structure. The sales centre should be able to provide you with the periods that deposits are due.

2) After you make your deposits, I don't see any benefit of making any additional payments to lower your mortgage until the date that you apply for a mortgage. That is, unless the developer provides you with a discount on the purchase price (not sure if this practice ever takes place). In the meantime, you might as well make your savings work for you in a short term safe investment such as a high interest savings account or GIC. There is no point in making a larger downpayment today if it's going to cost you earning potential over the course of that 1-2 years.

3) Determine the deposit structure first and then determine when you'll need to withdraw via the HBP.

4) You don't (necessarily) need an agent when buying a new development, but there is varying advice on matter.