It’s been a while since we provided a few tips and notes about buying new construction homes. Whether you’re buying your first home or you’re buying direct from the builder or developer for the first time, the list below will be helpful!
1) Registering for projects
Part of the development process for a builder is to collect registrations. This means they are compiling a database of people who are interested in purchasing a unit or lot in the new project. That person is you.
Depending on the builder, the registration form may ask a wide variety of questions, such as age, price range, preferred floor plan size, etc. Some registration forms will simply ask for contact information.
We highly recommend registering for any projects you find interesting. Builders usually give registrants priority access before the general public, which means you get access to better pricing and a wider selection.
2) Using a real estate agent
Some builders cooperate with real estate agents and some do not. If the builder cooperates with brokers, then a broker event will be hosted, usually before opening to the public. It’s not really your responsibility to know whether the builder works with agents. If you are using an agent, your agent should get in touch for you.
It may make you nervous to walk into a sales centre without the knowledge of your agent, but buying new construction is different than buying resale. There isn’t much negotiation involved (unless you’re trying to get some free upgrades), and even though you’ll need a lawyer to review the Agreement of Purchase and Sale, it’s very unlikely that a builder will actually make any changes.
To accept your deal, the builder needs you to provide pre-approval or a bank letter. If there’s an opening you plan on going to or you have an appointment at a sales centre, then make sure you have your pre-approval ready.
Builders usually only advertise starting prices, so you don’t know the exact amount you’re going to end up spending. If you’re pre-approved for your max amount before going in, then you know what you can afford.
4) Floor plans, renderings, and models
In resale, you can walk through the home you’re going to buy. When it comes to buying new, all you have are the floor plans, renderings, and model homes/units. Keep in mind when you walk through model homes, it’s probably not all standard, so don’t be shy, ask about the upgrades and what’s included.
The renderings will be beautiful and the floor plans will look spacious, but manage expectations and do your research. If you have a floor plan in mind, tape it out on the ground to get an idea of the actual space. You can also visit other communities and buildings built by the same developer to get a feel for their finished product.
Keep in mind that the builder will reserve the right to make any changes to the floor plan even after the Agreement is signed and construction has started. Examples of potential changes include, mirrored version of floor plan, door placement/changes, a column, etc. Usually, the changes don’t result in a loss or gain of square footage. Many builders, no matter what the amendment, will offer some form of compensation at closing.
5) Picking finishes
If you’re a first-time buyer in the resale market, you probably don’t have a major upgrade/reno budget for the home you’re about to buy. In the new construction market, you don’t need one. Most builders and developers offer a variety of standard options and many upgrades.
Since the home is being built brand new, you get to pick the finishes, such as the countertops, cabinets, hardware, tile, backsplash, etc. The selection process and range of options will differ from builder to builder, but this is something that you likely would not be able to afford if buying for the first time in the resale market.
6) Tarion Warranty
Your Agreement will include Tarion paperwork, which outlines your coverage. There is one-year, two-year, and seven-year coverage included. For most condo projects, the common elements are also covered. Tarion warranty is only applied to new construction homes. If you’re unfamiliar with Tarion, there’s a lot of info for you here!
We hope these quick tips make you more confident buying new construction homes!