Whether you’re a first-time homebuyer or you’ve bought resale properties before, buying new construction is a whole new ballgame.
Here are some important things to look for when buying new construction condos, townhouses, and houses.
Finding a Buyer’s Agent for New Construction
Finding a buyer’s agent who specializes in new construction is vital. They guide you through decisions, negotiations, and timelines. These agents know all about upgrades, inspections, and closing tasks.
Researching the Builder and Neighbourhood
Buying new construction is a big investment of time and money. It’s important to investigate the builder’s reputation.
You’ll want to know if any complaints have been filed again them. It’s also a good idea to visit finished projects to get a look and feel and see if existing homeowners are satisfied.
Check out the developer and surroundings before you decide to buy. Look at their previous projects and read online reviews from past clients. Find any lawsuits against them to see if there have been issues in the past.
This step helps you know if they build quality homes and keep their customers happy.
Investigate amenities nearby like parks, schools, and shops. Knowing what’s around your potential home is just as important as knowing who built it.
Choosing a Lot and Floor Plan
Consider lot characteristics, orientation, drainage, and location in relation to privacy and traffic. Analyze floor plan options for current needs, storage space, potential future expansion, and flow within the home.
Negotiate terms including financing, floor plans, upgrades, warranties, and appliances. Be mindful of what’s included in the contract; pay attention to details such as appliance packages and landscaping.
Manage expectations about the look of your home as model homes often showcase upgrades not included in the base price.
Negotiating and Choosing Upgrades
Buyers should negotiate financing, upgrades, fixtures, warranties, and appliances. Here’s what to consider:
- Upgrades can add value but also cost more upfront.
- Warranties are important for long – term peace of mind.
- Negotiate for energy – efficient appliances to save on utility bills.
- Consider the resale value of upgrades when making decisions.
- Get everything in writing to avoid misunderstandings later.
Being Prepared for Delays and Managing Expectations
Prepare for possible delays and setbacks in the new construction process. Expect supply shortages, weather-related interruptions, or unforeseen obstacles. Adjust timelines accordingly and have backup housing options ready.
Realistically understand that the model homes often showcase upgrades not included as standard.
Manage your expectations when it comes to the final look of your home. Model homes are staged with additional features that may not be part of the standard package. Prioritize getting a thorough home inspection before closing to identify any issues early on.
Inspections, Warranties, and Hidden Costs to Consider
- Keep all warranty documents from the builder, including the terms of coverage, to protect yourself from unforeseen expenses.
- Understand the builder’s warranty in detail, noting what is covered and for how long.
- Recognize the importance of evaluating hidden costs such as property taxes, association fees, and potential maintenance expenses.
- Consider hiring a professional for an independent home examination to ensure everything meets your expectations.
- Be aware of any warranty limitations and exclusions that may impact your coverage in the future.
- Factor in unexpected costs that may arise during the construction process or after moving in, such as landscaping or additional appliances.
- Review all warranty terms thoroughly to avoid surprises later on.
Other things to consider:
Condo Fees: If you’re buying a condo, it’s important to budget for condo fees. Condo fees are typically based on the square footage of the unit. It’s important to find out what they are in advance to make sure it is within your budget. Be sure to ask what is included in the fees –for example, hydro may (or may not) be included depending on the builder.
Assignments: With the real estate market red hot in many cities across Canada, a popular option for homeowners is to purchase a home in the pre-construction stage and resell before occupancy. Although there’s no guarantee of profit, it’s important to find out if the builder allows assignments; otherwise you could be forced to occupy the unit yourself.
Restrictions: If you’re purchasing a new condo or townhouse, it’s important to find out about restrictions. For example, a lot of condos limit the type (dog, cat, etc.) and number of pets you can own. Activities such as using your barbeque may not be permitted from your balcony.
Add-ons: If you own a car it’s important to ask about parking. In downtown condos parking comes at a premium – you’ll often have to pay thousands of dollars extra for this luxury. Parking can make sense even if you don’t have a vehicle, as it will be a lot easier to resell your property. If you’re buying a “shoebox” condo (less than 500 square feet), be sure to ask about storage. Storage is often a premium, so you’ll want to make sure you have a locker to keep your belongs like holiday decorations.
Deposit: Unlike resale, your deposit is typically spread over a number of months until the project is complete. It’s important to carefully note your payment schedule. You don’t want to miss a payment, as you could forfeit your deposit and lose your home.
Occupancy: Your occupancy date is when you can move into your brand-new home. Although this date can change, it’s a good idea to find out so you can start planning your move.
Amenities: If you’re moving to a new condo, be sure to ask about the amenities offered. Many condos offer security, swimming pools, saunas, and more.
Conclusion
In summary, buying new construction homes involves working with a specialized buyer’s agent and shopping around for the right mortgage lender. Researching the builder and neighborhood, choosing the right lot and floor plan, and being prepared for delays are all crucial aspects to consider.
Negotiating upgrades, fixtures, warranties, and getting thorough inspections are also important steps in the process.
