ave you ever been to a grand
opening of a new condo
development only to find out
most of the best suites have already
been sold? How can this be when it’s
the ‘grand opening’?
The real question is ‘which grand
opening is it?’
When a new development is
announced, there are usually several
sales launches and, depending
on which one you attend, it has a
significant effect on what suites you
can purchase and at what price. In
fact, you can end up paying more per
square foot for an inferior suite with
a less desirable view than a better unit
that was sold just a few days before.
Typically, when a new condo project
is released, it goes through several
stages of selling before the general
public has a chance to purchase.
Developers usually have their own list
of realtors and client ‘VIPs’ to whom
they offer the first block of suites.
VIP agents are those who have built
a relationship with the developers,
such as through involvement in
previous projects by the same builder.
For investors looking for the best
deals, connecting with one of these
VIP realtors could be a great benefit
to buying early and cheap, and thus
maximizing your investment.
In a very hot market, prices can
increase several times during the
initial stage, and as the building sells
through each stage, prices continue to
escalate to reflect growing demand.
Even in times of market cooling – such
as we’re currently seeing – the line-ups
may not be as long, but this method
of incremental up-selling is used to
ensure the preferred clients get ‘first-
in-line’ treatment.
Sometimes, in more challenging
markets, developers sweeten the
deals with additional upgrades such
as appliances and finishes (Canadian
Real Estate, February, 2009), but the
practice of offering ‘advanced,’ ‘VIP’
or ‘early access’ sales as a way to create
a pre-launch buzz continues.
So, if you’ve decided to buy a new,
pre-build unit ‘off the plan’, compared
to purchasing an existing condo – as