Buying a new home or condo online with a credit card
The journey to buy your next home could be just a click away.
Canadian real estate website BuzzBuzzHome is planning to launch a “buy now” option allowing home buyers to purchase pre-built condos and homes online with just their credit card.
“This process allows you to do all your research from discovery right through to signing in the comfort of your own home,” says Matthew Slutskly, the president and co-founder of BuzzBuzzHome.
No physical paperwork or sales centre is required. A real estate is agent is also not required, but if you do choose one, realtors are able to still make a commission through the online sale.
“The actual process of having to go to a sales centre is a really antiquated process,” adds Slutsky.
Canadians will have access starting in early 2016. The company plans to launch in Toronto in January and then expand to the rest of the country. Only builders who participate will have their properties listed online. BuzzBuzzHome is currently working on accommodating overseas purchasers as well.
Slutsky says this new feature will revolutionize the industry.
“We are talking about purchasing anything from a $200,000 to a $15,000,000 home online. It is an easier process.”
The website has something called a “market snapshot” where potential buyers are able to zone into a city or neighbourhood and compare the average price per square footage, floor plans, and the median price. It’s a feature, Slutsky says, that will help the buyer make more informed decisions.
“It’s going to give the purchaser a lot more information. It brings a lot more transparency to the marketplace.”
Concerns about Buy Now Feature
The “buy now” button, the first of its kind in Canada for real estate, has some concerned.
“To me it’s a big concern, it’s scary. I wouldn’t do it. I certainly wouldn’t suggest anyone else do it,” says real estate expert Ozzie Jurock.
Jurock fears this may lead to impulse buying on one of the biggest financial decisions of your life.
Slutsky points out that shoppers for new homes don’t have a physical property to view, but Jurock says it’s critical to see a pre-sale home or building even before completion.
“When you get there you get a sense of the neighbourhood, the general feeling. You don’t get that from your computer….What am I looking at? At the cemetery or the park? What is going to be built in front of me? Will I still have a view? Those kinds of things are really important,” he says.
Based on feedback from builders, potential buyers and realtors, Slutsky believes the system will be widely used.
How it works
Buyers are able to search the website’s listings of new construction developments across Canada. After clicking the ‘buy now’ button, the home buyer can review available documents online. Additional features, such as parking are also included online.
The purchase agreement is digitally signed by the buyer and then a developer signs off.
A maximum $5,000 deposit is required, which is paid via credit card on the web. After a rescission period ends, which varies from province to province, the cyber shopper then has to pay five per cent of the home value to finalize the deal. In B.C., for example, a purchaser has the right to walk way from the contract to purchase a pre-sale home for 7 days after there is an accepted offer. All deposits paid by the buyer of a pre-sale are held in a lawyers trust account.
During the rescission period, the buyer can cancel a purchase and get their $5,000 deposit back.
Slutsky believes parts of the real estate industry is antiquated, and sees the “buy now” button as the next step in the industry’s’ evolution. In the past, he says, many consumers were skeptical about buying anything online and now it has become the norm for many.
He says the real estate sector is bound to follow the trend.
“I think we’re still a little bit early to see a lot of online sales in the resale section, but I think it will become more of the norm in the new construction industry.”