By Anna Okorokov

All the Facts First Time Home Buyers Need to Know

Are you a first time home or condo buyer and have a bunch of questions you’re too scared to ask? Going through this process for the first time is a complicated experience. There are strict timelines to keep in mind, documents and forms required and applications to be filled out. To help you navigate this risky area and avoid common pit-falls we have compiled the NEED TO KNOW facts and answers to the most common questions clients ask.


  1. How do you purchase a pre-construction home? Usually you can walk into a Sales Office and deal with the Builder’s Sales Team directly. You do not need your own real estate agent for this step. If you decide to buy the home, you will sign an Agreement of Purchase and Sale.
  2. Usually, there is a standard 10 day period in which you can review the Agreement of Purchase and Sale with your lawyer and back out of the deal if you need to. Your lawyer can also write to the builder’s lawyer and negotiate terms before confirming that you will proceed with the purchase. You should receive and approve the negotiation letter with your lawyer before it goes out.
  3. Your lawyer will charge a fee to review your Agreement of Purchase and Sale. This fee also usually includes any letters and review of the builder’s reply. You should budget about $300 for this step.
  4. The Agreement of Purchase and Sale will have a breakdown of deposit dates on which you will need to provide a set amount of funds towards your home purchase.
  5. Be prepared for long delays. Purchasing pre-construction homes means that anything could happen during the time your home is being built and it is very common for the project to be delayed for months and even years.
  6. New construction properties are a good choice for investors who are not in a rush for a property or a buyer who is not in a rush and requires more time to save money and has a deposit structure to follow. 
  7. The date on which the deposit payments have all been made and the house is ready for you to move in is called the Closing date.  You will get a Final Statement of Adjustments on this day which will include additional fees you will need to pay. These fees will be about $10,000 and are used to cover levies/development charges, etc. 
  8. If you are unable to move into the unit on Closing and need an extension, this will cost you some penalty fees. Builders have discretion on how much penalty to charge. Your lawyer should ask the Builder for an extension, if required, well in advance.  In some cases, the penalties are noted in the Agreement of Purchase and Sale otherwise it may have to be a negotiation with the the Builder. 
  9. If you are purchasing a new construction property and you will not be living in the property, nor any immediate family members, then you WILL NOT be entitled to the HST rebate.  However, you could apply to get it as a Landlord – it can take some time before you are approved for such a rebate.  
  10. If you want to use the property as your primary residence and/or you are purchasing the property for an immediate family member to live in, you should notify the Builder so they can provide the necessary HST rebate forms and credits for final closing.


Buying a pre-construction condo is similar to a preconstruction home – you can go directly into the Sales office of any condo project and meet with a real estate agent assigned to sell that condo. If you want to proceed with a purchase of a unit, you will be asked to provide a certified cheque or bank draft on the spot. It may take some time for the Agreement of Purchase and Sale be made available to you. If you change your mind before you have signed the Agreement, you can retrieve your deposit funds from the sales office and cancel the transaction.

Once you have a Purchase Agreement, you should take it to your lawyer for review (about $275.00).  This should be done as soon as possible because you only have 10 days to rescind the Agreement if you choose to walk way from the purchase.

There are two stages in this purchase. The Occupancy Closing and the Final Closing.

Occupancy Closing

  1. Happens when the Builder deems the unit to be livable and an occupancy permit is issued by the City/Town. The Builder will then notify each purchaser that Occupancy Closing has been scheduled. This stage is similar to paying rent until you take ownership.  You are required under the terms of the Agreement to occupy or at least pay occupancy fees every month. These fees include estimated common expense fees, property taxes, and interest.
  2. If you are unable to move into the unit on Occupancy date and need an extension, this will cost you some penalty fees.
  3. The Occupancy stage can last anywhere from 2-10 months depending on the project.
  4. If you are taking out a mortgage, it is very important to keep your Mortgage Representative updated on each process so they can start preparing and ensure there will be no delays by the time Final Closing is scheduled. 
  5. You should apply and prepare for your mortgage early on in the process.
  6. The Builder’s lawyer will provide a short-form Statement of Adjustments outlining the amount they require for this stage. 
  7. The balance due and paid on Occupancy Closing is treated as a deposit for Final Closing. 
  8. The Statement of Adjustments provided on Final Closing should reflect the amount you paid on Occupancy.

Final Closing

9. Once the Declaration is registered, a final closing date is established and notice is usually provided to the Purchaser and their Lawyer. 

10. You need to send this Notice to your Mortgage Representative as soon as possible so they can start preparing your mortgage documents.

Toronto is becoming a HOT Buyers Market at this time. Whether you are a first time or repeat buyer these considerations apply to everyone. Happy bargain hunting everyone!