VIP opportunities are the best way to invest in real estate as they provide an abundance of savings and benefits. In this comprehensive overview, we take a look at the following:
- VIP Terms You Need To Know
- Incentives to Purchase During a VIP
- Buying a VIP through TheRedPin.com
VIP Terms You Need To Know
Before we jump into the benefits of buying during a condo’s VIP phase and the process of buying, lets take a look at some of the important terms you may not know before jumping in! you may here the builder or your real estate agent throw these terms around, and you want to make sure you know what they are talking about.
A worksheet is basically your application for a VIP project. What this form does it put into perspective what you’re looking for from a particular build, outlining your top 3 floor plan choices on a first-come first-serve basis. This form asks for pertinent details including your name, address, occupation, SIN, mailing address, e-mail address, telephone number and more.
This sheet is your request to the builder, outlining what sort of unit your looking for. It is very important that you submit your worksheets on time and as soon as possible, to ensure you get what you want, first.
2. Deferred Deposit Structure
When investing in a pre-construction condominium, the deposit structure can vary builder to builder. A common trend is a deferred deposit structure. A deferred deposit structure breaks down and stretches your deposits over a longer period of time so you, as the buyer, can have a sufficient amount of time to come up with the money. Instead of having to pay all at once, there is a breakdown of multiple installments. For example, you could pay $2,500 when you sign for the unit, 5% at 30 days from signing, 5% at 180 days, 5% after a year and 5% at occupancy.
This is your total down payment, spread out over a period of time to make things more financially achievable. Many people cannot afford large deposits – especially since deposits are usually 20-25% and not as low as 5%.
3. 10 Day Cool Off Period
The 10 day cool off period is similar to the 14 day return policy you get at Future Shop. What you, as the buyer, get is 10 calendar days (including weekends) to decide whether you really want the unit you just requested for. It provides an opportunity to look over all the legal documentation and make necessary changes with your lawyer.
What this also provides is a chance to think with a clear head. Most homebuyers get caught up in the adrenaline of the moment and jump at whatever opportunity they, at the time, think is best. The 10 calendar days provides a chance to step back from the roller coaster ride and really evaluate the property purchase you intend to make.
Buyers must ensure this is a part of the deal. Every pre-construction build must have this. It is required by law.
4. Connection/Metre Charge Cap
The closing costs of a pre-construction condominium can be far and wide, and careful planning is needed so that these costs do not go out of hand. Part of the closing costs are the connection / metre charge cap, a cost involved with connecting utilities to your property. The builder profiles a great deal of support for this, capping the cost for connecting utilities at $5,000. If your cost is below that amount, you only pay what you need to. If, however, it is more than $5,000, you only have to pay the $5,000. For individuals buying larger units with more square footage overall, this is where the cap comes in handy.
5. Upgrades / Picking Finishes
When you get closer to moving in, you get a chance to pick upgrades and finishes to the unit you bought, a long time ago. The reason why this does not happen at signing is because at the time of the signing, changes to the overall build are still possible and trends are constantly changing. If a project is 2 years away from being done, the builder does not want to offer options that will either become outdated or old-fashioned by the time the building is ready.
Buyers should ask if there are any upgrades included with VIP opportunities. Most of the time, there is always something included. This could be anything from granite counter tops or interior detailing. Frankly, the opportunities are endless and it be a good idea to ask if there are any upgrades included with your VIP, making the end-deal a pretty good one.
6. Floor Plan Modification
The term itself is somewhat self-explanatory. The fact is, majority of homebuyers think that a floor plan has potential if certain walls were to be removed, and wait until the project is ready to move in to start making changes. The fact is, DIY can potentially ruin your brand new home.
For an extra change, the builder will make the necessary changes you wish to see with the floor plan, doing it right the first time and making the changes aesthetically pleasing. Plus, the builder will have a better idea of what can and cannot work structurally, and with all the inner workings of the home such as electrical and plumbing. Plus, the builder may even have recommendations.
Perks of Buying During a VIP
The most asked question by home buyers is: what are the benefits of buying during a VIP? Rightly so, too. What does a limited purchasing window provide home buyers? Quite a bit actually and buying through TheRedPin.com increases the benefits even more.
1. The Best Floor Plans, The Best Prices
The biggest benefit of buying during a VIP is the benefit of best floor plans at the best prices. A VIP provides home buyers with early, before-public access to a property and as a result, have access to a majority of floor plans. It should not be underestimate that you can have a cup of coffee when buying during a VIP. There are many individuals interested in a property during the special phase and units will be given to buyers on a first come, first serve basis, based on pre-approvals, and much more.
2. Early Investment Opportunity
A VIP provides a home buyer with a chance to invest in a property at a time when prices are likely low and will appreciate as the building appreciates. This a concept that can go two ways, because of the surrounding neighbourhood does not appreciate or develop, the property may not gain any value or may in fact lose value. This is a gamble most people take but with careful due diligence, buyers can get a handsome gain from their investment.
View our due diligence points in Step 2 of buying through TheRedPin.com
3. TheRedPin.com VIP Condo Club Benefits
Buying a property through TheRedPin.com gives buyers an additional set of benefits not found anywhere else! Home buyers receive the following benefits courtesy of our VIP Condo Club:
- Leasing of unit upon occupancy at no charge
- Free 1 hour consultation for picking finishes with our interior designer
- Pre delivery inspection by a qualified inspector
- Free window coverings for your new unit
- Special pricing for multiple unit purchases
4. Other Potential Benefits
- Parking Spaces: Parking in Toronto is not just difficult, it’s very expensive. Getting a parking spot in a condominium can cost up to $65,000, which is quite a lot of money for anyone investing in an average downtown condo. Sometimes developers can include a parking space with the condominium as a “deal-maker” incentive for the buyer. This is not just a big savings, but automatically boosts the value of your condo because now you have a parking space (which is essentially a piece of real estate in its own right).
- Storage Units: There is no such thing as enough space. The more space the better and storage units within condominiums provide the extra space that come in handy for seasonal items, luggage, bicycles and more. Like parking spots, storage units are sometimes added into the sale price as a bonus item for new condo buyers.
- Upgraded Finishes: Some units in the VIP phase come with an upgraded selection of finishes, such as marble countertops, hardwood floors and more.
- Appliances & Freebies: Sometimes, condominium developers will now offer substantial upgrades to these, including stainless steel kitchen appliances and more. Some builders even throw in freebies such as flat-screen TVs for the unit and other gadgets. This usually only happens during a VIP phase of a property.
- Capped Levies: There are certain levies that need to be paid (such as taxes for area infrastructure development – such as a new subway line close by) by the buyer. In a resale situation, these could soar up to $10,000+. In condominiums, especially during the VIP program, levies are usually capped at a fair amount with the remainder of these taxes being paid by the developer.
- Partial Maintenance Fees Paid: Maintenance fees can be quite a significant part of your monthly expenses. During the VIP phase however, a developer may pay off some of those maintenance fees for a set period of time, accumulating to quite a bit of savings.
- Gift Cards + Value Incentives: Sometimes gift cards or transit passes will be thrown in with the deal. May not sound like a lot, but imagine transit passes for a year? That’s free travel in the city – which could add up to well over $1000.
- Larger Discount: A VIP opportunity may also provide a buyer with the opportunity to grab a larger discount. Everything is on the table for discussion and a larger discount is by no means, out of the question. So not only are you getting a better deal than everyone else, you may get a better deal than the better deal!
DID YOU KNOW
1. Up to 60% of condos in a pre-construction build are sold before they are released to the public, to family and friends of builders and true VIP clients. We give you the same treatment with TheRedPin VIP Condo Club to get the best units at the best prices with the best incentives.
2. If you buy on a higher floor your occupancy date is also delayed, but you end up paying occupancy fees for a shorter period of a time. On the other hand, these units are also more expensive, so you have to evaluate the floor that works for you.
3. VIP condo units remain to be the most affordable ownership option for urban living.
How do you sign up for a VIP property on TheRedPin.com?
Step 1. Make sure your finances are in order
It is crucial that you understand the importance of pre-approval. Without the proper finances, new condominium builders will not approve your want to purchase a property. The reason why this is important is because new condominiums – especially during a VIP phase – demand a near 20% down-payment, in addition to having a good financial standing. A pre-approval speeds up the process.
Additionally, take a good look at your finances to see if you have the capacity to cover added costs. The biggest mistake home buyers make when purchasing a VIP property is not keeping a buffer amount in case of additional charges or necessary expenses.
Step 2. Have a good idea about where you want to buy and why
Before you jump to a VIP opportunity, a little due-diligence is in order. You should have a good understanding of what kind of property you want to invest in, what suits your long-term needs and where you want to invest. One of the biggest factors to consider when buying a VIP project is its neighbourhood. Without looking at the neighbourhood, where it shall be located, you are pretty much buying blind!
Here are some factors to consider:
- Gentrification of the neighborhood: Improvement within a lower-income neighbourhood is an indicator of “good things to come”. Investing in a condo in a neighbourhood like this is usually a good idea, considering that more businesses will move in as well (where you see a Starbucks…), more residents will be attracted to the area and over time, the value of your home will improve as well.
- Future Happenings: a major event or festival can really change the dynamics of a neighbourhood, sometimes attracting business development. The Pan Am Games in Regent Park is a great example. The Games will invest millions of dollars in community revitalization while surrounding businesses and condominium developers will create the landscape to cater for that community and beyond. It’s important to see this as a sign of what future value your investment can hold.
- Amenity Improvements: Community improvements are one thing but amenity improvements – such as transit upgrades – can lead to leverage. A good example is Union Station, currently undergoing major structural changes to accommodate more traffic. This will be beneficial for all the new residents who will enter the neighbourhood, especially those who will stay in the new condominiums lining front street and lake shore. Check out Harbour Plaza Residences, for example!
- Other Projects: Is the neighbourhood a developing one, attracting many condominium builders? Will there be more buildings? A prime example is the Yonge and Eglinton neighbourhood which is currently seeing a lot of condo development. It is becoming its own version of downtown Toronto with all the necessary amenities and conveniences in one location. Other projects indicate growth and sustainability within the community. However, over saturation can also occur, which could reduce value. Something to carefully evaluate.
- Current Amenities or Future Developments: Is there existing access to everyday needs and essentials? Will there be future developments that are important? These are some of the questions to think about when it comes to amenities. Shops, grocery stores, future transit lines, development of local restaurants and cafes, etc, all add to the living experience. It is therefore important to identify these before considering an investment.
- Close to Workplaces: Being close to work is a major bonus for many people. Saves you on transit costs and what not. However, it is also beneficial if you are thinking about a future tenant. Buying a Bay Corridor condo will provide easy access to those working in the financial district, and thus make the condo quite appealing. Its important for you to consider this before making an investment because it could dictate future sources of income as well.
Step 3. View new VIP projects on the site or sign up for the blog/newsletter to get the newest updates about VIP projects.
TheRedPin.com is a powerful database of information, providing details on all up-and-coming VIP projects, information about the individual projects and more. Visit the site often and use our interactive map to keep up-to-date on what properties are coming in areas where you want to invest.
Alternatively, you can sign up to our newsletter which provides a weekly update on new, exciting VIP projects, helpful resources on real estate and much more. You can sign up to the blog using the following button:
Step 4. Get on the list for a project you’re interested in
Found a project you really want to have a chance in investing? Join the projects VIP list. Click the “Register” button on the top banner (See Photo Below) to join the list for the project. You will receive email updates on the project, be forwarded any information that has been released about the project and be notified of VIP launch dates and events where you can own a piece of the project.
Step 5. Visit the showroom with our VIP expert
If applicable, you can take a tour of the model suite with our VIP expert, where you will get a better idea of the property, the suite you are interested in and be able to deliberate if there is anything else you would want with the property.
Step 6. Fill out a worksheet & submit to the builder
Your wish list is filled out and submitted to the builder. It is important to note that your unit is allocated on a first come first serve basis, so as soon as worksheets are being accepted, you should contact TheRedPin.com’s VIP Expert and get your worksheet in ASAP.
Step 8. You are allocated your unit & appointment to the sales office for signing a deal is made
One your unit is allocated, you will be asked to set an appointment with the sales office to sign the deal. After this, the 10 day cooling off period will begin, the deposit check of $2000-2500 dollars is submitted (not cashed until cool down is over), and then you go onto the regularly scheduled payments as per the builder’s payment system