🏗 Buying Pre-Construction? What You Need to Know Before You Sign

Edith Parinas
Oct 15
3 min read

🛠 The Allure of Brand-New

Buying a pre-construction home can feel like designing your dream house from scratch — modern finishes, energy efficiency, and the pride of being the first to live there. But the path to move-in day can be a winding one, and it's important to walk it with your eyes wide open.

This is one of the most exciting — and nuanced — ways to become a homeowner. Whether you're buying for yourself, your family, or as an investment, here's what you really need to know.

🧾 1. The Deposit Structure Isn’t Like a Resale

With resale homes, your deposit is usually 5%, held in trust.With pre-construction, builders often ask for a deposit structure paid in phases. For example:

$5,000 on signing
5% in 30 days
Another 5% in 90 days
Final 5% in 365 days

That means you need to be prepared to save more cash upfront than you might for a traditional resale purchase.

💡 Tip: Your deposit is usually protected under the builder’s warranty program (e.g. Tarion in Ontario), but always ask for the full breakdown.

⏳ 2. Timelines Are Flexible — Very Flexible

Your agreement might say your new home will be ready in 18 months... but delays are common. Supply chain hiccups, permit issues, and weather can all push back your closing date.

Most contracts include delayed occupancy clauses, so be prepared to:

Extend your current rental or living situation
Adjust your mortgage pre-approval if the delay is lengthy
Budget for potential interim occupancy fees if it’s a condo

🏘 3. Mortgage Pre-Approval ≠ Final Approval

Your mortgage pre-approval today might not apply when the build is finished 2 years from now — especially if rates or your income change.

You’ll likely need to requalify closer to closing, so it’s critical to:

Keep your finances stable
Avoid large new debts
Stay in close contact with your mortgage broker (👋 hi, that’s me)

💬 I help clients stay mortgage-ready throughout the entire pre-construction timeline, so there are no surprises.

🕵️‍♀️ 4. Read the Fine Print (Then Read it Again)

Pre-construction agreements are long, full of legalese, and absolutely must be reviewed by a real estate lawyer before you sign.

Look out for:

Closing adjustments: extra fees like development charges
Right to assign: can you sell before closing if needed?
Material change clauses: can the builder alter the layout or finishes?

It’s not uncommon for buyers to be surprised by extra costs — so let's eliminate surprises upfront.

🔄 5. Why Mortgage Advice Before You Sign Matters

Working with a mortgage broker before you commit to a builder ensures:

You’re shopping within your actual budget
You know which lenders are pre-construction friendly
You’re not caught off guard by future rate changes

📌 And as your mortgage partner, I’ll help you track timelines, update approvals, and walk you through the final steps when your home is finally ready.

🧘‍♀️ Edith's Real Talk

Pre-construction isn’t a short-term strategy — it’s a long-game. It’s perfect for those who don’t need to move right away and want a fresh start.

But it’s not as “set it and forget it” as it looks. You need someone keeping tabs on financing, timing, and updates — and that’s exactly what I’m here for.