Buying Pre-Construction: Deposits, Closing Delays, and Assignment Sales

Buying pre-construction means purchasing a unit or home before it's built, based on floor plans and a builder's projected completion date — which can shift, sometimes by a year or more, due to construction delays.

Instead of a single down payment at closing, pre-construction deposits are typically staged over the pre-construction period (a percentage at signing, then further percentages at intervals before occupancy), all before you've taken possession or arranged final mortgage financing.

Your mortgage rate isn't locked in until much closer to actual closing — meaning you're taking on real interest rate risk over the years between signing and completion, since your final mortgage will be arranged at whatever rates exist when the building is actually ready.

An assignment sale is when the original pre-construction buyer sells their contract to a new buyer before the building closes — effectively selling the right to complete the purchase, rather than selling a finished property. Assignment sales involve their own tax treatment (proceeds can be treated as business income rather than a capital gain in some cases) and typically require the builder's consent — this is specialized territory worth involving a lawyer experienced specifically in assignments, not just general real estate.