How Buying a Pre-Construction Condo in Toronto Works: Five Steps From Deposit to Closing

Buying a pre-construction condo in Toronto runs in five steps, and signing is the start, not the decision. You submit a worksheet and the builder allocates a unit. You sign, then use the cooling-off review window to have a lawyer check and negotiate. You pay the deposit in stages. You take interim occupancy and pay a monthly fee. You close when the building registers.

Step 1: The Worksheet and Launch Week

Nothing in pre-construction starts with an offer. It starts with a worksheet: a form where you list the unit types you want, the floors you would accept, your budget, your ID and the details for a deposit draft. It is not binding. The builder uses the pile of worksheets to decide who gets which unit, and buyers who came in through a platinum or VIP agent are allocated first. You do not pick a unit. You are offered one, usually by phone, with a short window to say yes.

So the real work happens before launch week. Decide your maximum price, the exposures you will not accept, the parking and locker question, and the conditions under which you walk. Have the signing draft ready as cleared Canadian funds, not money in transit from abroad or sitting with an exchange house. A sales office runs on urgency, and the only defence is arriving with your decisions already made. One scoping note: this roadmap is for condos. A freehold new build, a detached or a town in a subdivision, follows a different path, with no interim occupancy and title at completion, so do not assume these steps apply to it. For choosing the project and the builder in the first place, read Seven Things to Know Before You Buy a Pre-Construction Condo in Toronto.

Step 2: Signing and the Cooling-Off Review

At launch you sign the agreement of purchase and sale and hand over the first draft. Then a review window opens, and this is the real decision point of the whole purchase. The clock should not start until you hold the complete package: the signed agreement, the builder's disclosure statement and the Condominium Guide. They may arrive together or separately. Your lawyer confirms on day one that the package is complete, how many days you have and when the clock started. If something is missing, say so in writing right away.

Use every day of it. A lawyer who closes pre-construction deals reads the agreement and the disclosure for the things that cost money later: the cap on development charges and levies (negotiate one if there is none), whether you may assign the contract and what the builder charges for consent, whether you may rent the unit out during interim occupancy, the outside occupancy date and how far the builder may push it, and what happens to parking and locker. This is the only point where the builder will trade. After the window closes you are executing a contract, not negotiating one. The document checklist in Buying Pre-Construction in Toronto? Read This First covers the paperwork in detail.

Step 3: The Deposit Schedule and Your Mortgage Plan

The deposit is not one cheque. The agreement sets out a schedule: a draft at signing, further instalments on fixed dates over the following months and years, and often a final piece at occupancy. Ask where the money is held; it should sit in trust with the builder's lawyer, and your own lawyer should confirm that in writing. Then build a calendar of every date and plan your income and savings around it.

If money is coming from outside Canada, add weeks. Transfers sit in bank holds and compliance checks, the bank will ask you to document where the money came from, and a builder's deposit date does not move for a delayed wire. Order each draft well ahead of time and keep the paper trail. On the mortgage: a pre-approval at launch is a comfort letter, not a commitment. Expect your lender to qualify you again close to final closing, on your finances and the appraisal at that time. Plan for an appraisal that comes in below your purchase price, because that gap is yours to cover in cash.

Step 4: Construction, the PDI and Interim Occupancy

Then you wait. Excavation, structure, enclosure, finishing: each stage can slip, and the occupancy date in your agreement is a target with extension rights attached to it. Keep your file alive through those years. Save every builder notice, and tell your lawyer and your lender when anything changes in your life, because it will matter at closing.

Before keys you do a pre-delivery inspection, the PDI. Walk the unit with the builder's representative and list every defect in writing, however small, because that list is what the warranty work will be measured against. Then comes interim occupancy: the unit is ready but the building is not yet registered as a condominium, so title cannot transfer. You get the keys and you pay the builder a monthly occupancy fee. It is not rent and it is not a mortgage payment. Treat it as a carrying cost, not a payment toward the unit; ask your lawyer to show you how the agreement calculates it and to confirm whether any of it comes off the price. Lower floors usually take occupancy months before upper floors, so a low-floor unit tends to carry a longer occupancy period than a high-floor unit in the same tower. If you planned to rent the unit out in this period, that right had to be written in back in Step 2.

Step 5: Final Closing and the Statement of Adjustments

Registration of the condominium corporation triggers final closing. Title transfers, your mortgage funds, and you pay the balance of the price plus the statement of adjustments. That statement is where the surprises live: development charges and levies if you never capped them, utility connections and meters, warranty enrolment, adjustments for taxes and common expenses, and on top of all that your land transfer tax and legal fees. Ask for an estimate of the adjustments back in Step 2, not the week before closing. If you intend to rent the unit out rather than live in it, ask your lawyer and accountant before signing how HST is treated for an investor rather than an owner-occupier, because the answer changes the cash you need at closing.

Some buyers never reach this step because they assign the contract before registration. Do not sign on that assumption. Assignment needs the builder's consent, usually a fee, and a buyer willing to pay, and in a soft market the last of those is not guaranteed. Read Pre-Construction Is Crushing Toronto's Condo Buyers: Assign or Close? before you count on it. My view: pre-construction suits a buyer with a long horizon, stable income, cash set aside for the adjustments and a genuine intention to take title, in a location where the finished product will be scarce. Downtown Toronto, North York and Willowdale launches, the towers along Yonge Street through Thornhill and Richmond Hill, and the Markham Centre and Vaughan Metropolitan Centre projects all follow this same five-step path.

Moe Asgarian has worked the GTA market for 15+ years and is ranked in the Top 1% of real estate agents in Canada. If a launch has caught your eye, have the agreement and the deposit schedule reviewed with someone who closes these deals before you sign anything. Fill out the form at the bottom of the page or book a free consultation, and browse our pre-construction guides for the rest. Stay well and take care.