3 ms·
In Toronto, I heard stories of brokers buying 5-10 pre-release condos and selling them all before taking possession. These people didn't have cash to pay more t
by trapperkeeper79 10y ago
In Toronto, I heard stories of brokers buying 5-10 pre-release condos and selling them all before taking possession. These people didn't have cash to pay more than the deposit and became millionaires overnight. I don't know how pervasive this was though. There are not too many asset classes where one can pull this off .. so I guess kudos to those people.
- CountSessine 10y agoI think having tighter contracts to keep people from weaselling out of their pre-sale commitment is a Very Good Thing; anyone who makes a such a commitment should be bound to it. But here in Vancouver there are people who are upset that pre-sales sometimes don't include the general public. There are builders who've restricted pre-sales to friends and families, and this is perceived as 'unfair'; when these units do show up on the market, they'll be more expensive than the pre-sale price (of course! they no longer get the discount and the market rose in the 8 months that it took to finish the project!). I think there are Vancouverites who then assume that this difference is cumulative across the market and that it is the cause rather than the symptom of the ridiculous increase in cost of housing here.
- andkon 10y agoThis is equivalent to betting on the margin — the downside is that you end up holding a contract that commits you to paying for the whole condo, and if you can't get rid of that contract when the market goes down or you become incapable of paying, the developer will sue you (see above comment about what happened in 2008 in Vancouver).
- acchow 10y agoThis is not easy to do. Most developers in Toronto will not allow you to post on MLS before possession. And many will not even allow reassignment (change the name of who will own the condo).