The Deposit structure for purchasing a pre-construction condo varies by builder and project. Depending on the project’s deposit structure you can expect to put down between 5%-20% of the purchase price. Most builders require a total of 20% down. However, it is important to note that the 20% is not normally expected upfront in one payment. This allows a pre-construction condo purchaser to split up payments.
Deposit Structure Example:
Let’s say you were interested in buying a pre-construction condo for $300,000.
$2,000 deposit given when signing the offer $13,000 (balance of 5%) in the first 30 days (from signing), $15,000 (5%) in 90 days, $15,000 (5%) in 170 days, $15,000 (5%) in 365 days.
This makes a total of 20% (or $60,000) of the $300,000 purchase price. Upon the condominium finishing construction and the Agreement of Purchase and Sale being completed, the mortgage on the new unit would now be $240,000.
Although most pre-construction condos will have a similar structure, at times builders will offer different incentives or payment schedules when signing for a unit. For instance, a builder may offer $2,000 down when you sign, the balance of 5% in the first 30 days, and the balance of 15% on occupancy. This structure makes the 20% deposit more manageable and easier to plan for when arranging your finances.
Here is an example of a past project
Want to learn more about investing in condos? Subscribe Below!
This information is provided for general information purposes only and is not to be relied upon or construed as legal, real estate, or other professional advice or opinion. We do not make any representations or warranties, express or implied, as to the information provided. Under no circumstances shall we have any liability of any kind for the accuracy, use, or otherwise, of this information, all of which is provided. Any reliance you place on such information is strictly at your own risk and liability. Clients are strongly urged to seek professional advice on specific issues.