The Step-By-Step Pre-Construction Buying Process in Ontario

I’ve walked enough buyers through the pre-construction process, from their first sales centre visit to the day they get keys, to know where people get tripped up. It’s rarely the big, obvious red flags that trip the deal up, it’s usually assumptions buyers made without clarifying details before hand that trip up the deal. This guide is here to help cover some of the main red flags we see, but nothing beats one-on-one representation from an experienced preconstruction sales agent, so please reach out of you’re looking for a Preconstruction property.

 

1. Establish Your Budget and Prepare Your Deposit Funds

This is the step most buyers skip, and it’s the one of the first things clients trip up on. Unlike resale, preconstruction sales usually require a cheque with your offer. Without a cheque, another buyer can take the unit from under your feet, even if you’ve signed. In preconstruction, you sign the offer, deliver the cheque (ASAP), and then the sales agents submit it to their management to sign. Management will not sign until a cheque is received, so if two offers come in at the same time, the unit goes to the first person through the door with their cheque.

The first cheque can usually be a regular check, but it must be replaced by a bank draft within 10 days. Standard deposit structures look similar to below:

– 5% at signing
– 5% at 30 to 90 days
– 5% at 180 to 270 days
– 5% at occupancy or the 1-year mark

When you drop off your bank draft, you are required to drop off the remaining cheques for the remainder of the deposits. The builder will cash them on the designated dates. If a cheque bounces, you will receive a sizeable fine for the additional admin work.

With any funds that you need for the purchase, it’s highly advised to remove it from the stock market, or to move it into very safe investments. Once the offer is firm and binding, you’re legally required to complete the deposits, and purchase the property once it’s built. So don’t take risks with money that is already spent.

2. Partner With a Specialized Pre-Contruction Agent — Before You Register Anywhere

The preconstruction real estate market functions differently than the resale. When you’re buying resale, you can choose at anytime to hire an agent to represent your best interests, even if you started the buying process with the listing agent. However, developers look at this differently. They spend hundreds of thousands of dollars on marketing, and they want to benefit from their direct marketing. If a client walks into the sales office, the developer will register the clients as their own “lead”. Once you’re in the developer’s system, you’re their client, and the developer will not pay a commission to any agent you might later choose to hire.

3. Get Pre-Approved With The Bank

For most preconstruction projects, you have a 10-day cooling off period after signing. During this time, you need to confirm your ability to finance the purchase, but 10 days is not enough to prepare all the necessary paperwork to submit for approval. Engage with a mortgage broker, or your bank, before going to the sales office so that you can get your financing confirmation before the 10th day of your cooling off period.

Note: The bank will either give you a very unreasonable rate, or they won’t give you a locked in approval, for a project completing in a few years. But they will run the numbers and let you know if it works at today’s rates.

Insider tip: The developer usually has a special agreement with the bank financing the project to offer buyers incredible mortgage opportunities. These banks will lock in today’s mortgage rates for up to 3-4 years sometimes, and if the value of the property drops, they will probably appraise it at the purchase price (That’s happening right now in 2026). 

 

4. Narrow down a Location, Builder, and Price Point

Some buyers are only concerned with buying at the “vip launch”, but we think it’s important to avoid the hype of VIP sales and focus on the actual project. Focus on your needs, wants, and work with your agent to narrow down the right building.

 

5. Calculate The Out-Of-Pocket Purchase Price, With Closing Fees.

Preconstruction closing costs notoriously catch unsuspecting buyers off guard all the time. They might have experience buying a resale property, or this might be their first home, and often buyers assume there are no more fees on top of the price because the builder’s representative doesn’t have to disclose that to you.

Preconstruction properties usually have double, or sometimes triple, the closing costs of a resale property. The main fees are: development fees, land transfer taxes, utility hook ups, levies, tarion enrolment, law society fees, new home authority fees, as well as half a dozen nickel and dime charges that all developers tac on to your contract. A trustworthy real estate agent will be able to estimate these rather accurately for you, but it’s always good to review potential closing fees with your lawyer as well.

Another hiccup that catches many new condo buyers is intern occupancy rent. Many in the industry call this phantom rent. When a building is complete, you get the keys months before the building finally registers with the city and title is given to all the buyers. Because you don’t have title when you get the keys, you can’t get a mortgage. So the developer will charge you “interim occupancy rent” until closing day. Interim occupancy rent is calculated based on the remaining balance of the purchase price after deposits, estimated property taxes, and maintenance fees. In 2025, purchasers from 4-5 years before were badly burned by developers when interest rates rose significantly, and developers adjusted the interest rate on the unpaid balance of the purchase price to 6.5%-8.5%.

 

6. Submit a Unit Worksheet and Get Allocated

Once we identify a project worth pursuing, we submit a non-binding worksheet on your behalf. During very busy sales, the developer cannot guarantee everyone gets the exact unit they want. Instead, we submit a worksheet with your top three choices, and they will do their best to offer you your top pick. If they don’t offer you something you like, we can always request a second round (and usually sales managers keep a few pocket suites of the best floor plans for picker clients).

Once you’re offered a good unit, we accept and the developer sends the agreement of purchase and sale, along with the instructions for the deposits. The agreement will not be accepted by the developer until the deposit is dropped off.

 

7. Negotiate The Offer

Preconstruction sales contracts are negotiable, but not in the same sense as resale. You can read more about what’s negotiable here: What Is Negotiable When Buying Preconstruction In Ontario. 

 

8. Complete Your Due Diligence During The 10-Day Cool Off

Once you’ve signed, Ontario law gives condo buyers a mandatory 10-day cooling-off period under the Condominium Act. Freehold properties often also come with the same 10-day cooling off period, but it’s important to confirm that with the sales team before signing the offer. During these 10 calendar days, you can back out of the deal entirely and get a full deposit refund.

During these 10 days:

• Have a real estate lawyer review the full APS.
• Confirm your financing. The developer will eventually request proof of funds, or a mortgage letter, because it is a requirement of their own financing.

If the builder hears nothing from you, the deal will go firm automatically. They don’t need your permission to go firm, unlike resale where you need an amendment or waiver to be signed before the deal goes firm.

 

9. Keep Track Of Deposits And Important Dates

Once you’re firm, the first thing you should concern yourself is placing reminders in your calendar for the dates the builder will cash your post-dated cheques. Bouncing a cheque can put the agreement into breach, and there can be a wide range of consequences, the mildest of all is just an excessive admin fee.

The second step after going firm is to register with Tarion. You only have 45 days to register, so don’t wait too long after the 10-day cooling off period. Register here: https://www.tarion.com/registermyhome

A few months before occupancy, the builder will invite you in to choose your finishes. It’s very important to book your time slot with the decor centre. If you don’t book an appointment, the builder will choose the finishes of your property without your consent or input.

Tip: Research the cost of upgrades on the market before you pay for them with the developer. Developers often charge excessive upgrade fees, which don’t necessarily translate into a more valuable property. Upgrade things like: tiles, flooring, cabinetry… things that cannot easily be upgraded after the fact. But skip the builder’s window coverings, light fixtures, appliance upgrades, etc.

 

10. Attend Your Pre-Delivery Inspection.

As your home nears completion, you’ll be invited to a Pre-Delivery Inspection (PDI). This is a walkthrough where you and the builder representative document any visible deficiencies before you take possession. This inspection matters because it becomes your baseline record for warranty claims, so I always encourage clients to go through every room slowly and note everything, even small things. The developer usually gets most of this list repaired before your move in too.

Your invitation to the PDI is a courtesy. If you’re late, or try to reschedule last minute, they will do the PDI without you. However, you can usually have a representative attend the inspection with you (or on your behalf), so you can always have your trusted realtor, a friend, or your partner go.

 

11. Final Closing and Title Transfer

Once the municipality formally registers the building, the final steps happen quickly: your mortgage advances, the remaining balance is paid to the developer, land transfer taxes and the statement of adjustments are settled between your lawyer and the builder’s lawyer, and legal ownership officially transfers into your name. This is the moment your pre-construction purchase becomes a home you actually own outright, not just a contract. This happens usually within 1-month from the building registering with the city.

 

12. Register Your Tarion Warranty and Track Your Coverage Windows

Last step, keep on top of your Tarion Warranty. You should have signed up for it after purchasing the property,  but if you haven’t… do it now.

Your PDI is your first step to remedying issues in build quality and material workmanship. Anything not completed within the first 30 days, should be registered on the 30-day form provided by Tarion. This is crucial, because the developer still has their handymen and trades on site, who can repair the home in a timely manner. Once the 30-day period has passed, your next opportunity to report to Tarion is the 1-year form, which, when it comes to getting repairs done, is notorious for being very slow.

 

 

Pre-construction rewards buyers who plan ahead and act with quickly, but with caution. And, it can quietly penalize buyers who go it alone and just hope the developers sale reps will represent their best interests. If you’re thinking about buying pre-construction anywhere in Oakville or the surrounding GTA, reach out to Janette or me before you register for a project. That one conversation, at the very start, can make a huge difference in your preconstruction purchase journey.

— Chris