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Greater Toronto Real Estate Sales and Leasing
November 18th, 2018 
Lee Cornish
Broker

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Have you ever went to the grand opening of a new condo launch? Were you discouraged to find out that 20-30 percent, or more, of the units had already been sold? Who are these people who already bought? How did they get to buy ahead of time? Why did they choose the units they did? Did they pay the same price as the rest of us?

Builders today follow a tested sales model when it comes to selling units in their developments. The first round of purchases comes from friends, family, and associates of the builders. This is the opportunity to get the best selection and prices. This is where units can be reserved off of floor plans and price lists, alone. The next opportunity to purchase usually comes in the form of a vip broker's event. This is where realtors who are active in the new construction market can reserve units for their clients. Clients may or may not be allowed to attend with their agent. Weeks or months after the vip broker offering, a public launch will take place. This is where the builder makes their profits, and when the bulk of the properties are sold. A stylish sales centre equipped with scale models of the development, blown up floor plans on the walls, along with a model suite, are all used to move the product. Over this opening weekend, the idea is to sell enough of the inventory to secure the financing needed to begin construction. The remaining units can be sold off slowly, as completion can take 2-3 years.

Momentum is crucial when it comes to selling these new developments. That is why at each stage of the selling process, you can expect to see prices increase by 2-3%. On upcoming projects I will give my clients the opportunity to purchase at the very first stage of the process, with the absolute lowest prices and best selection. I also advise them about which units offer the best value for them as end user, quick resale, or long term investment. The best part is the added value they get goes straight to their investment because any commissions are paid by the builder as a cost of doing business.

Here's an example of how the same units can be priced throughout the selling process:

Builder's Associates  Release

VIP Broker's Release            Public Launch         Ongoing Sales          Potential Savings 
Suite A - $247,000  $253,000$259,500$265,500$18,500
Suite B - $394,500 $404,500$414,000$424,000$29,500
Suite C - $589,000$603,500$618,500$633,000$44,000

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