Buying New Construction

In today's market we are assisting more buyers with their purchase of New Construction real estate. There are some great deals out there.

Here are some things to consider before visiting builder's offices & model homes.

1. Work with a Realtor. In many cases, your realtor has invitations to special sales and events that are not available to the general public. The sales person at the new home site works for the builder. It is not their job to represent you as a buyer. Many builders will cooperate and pay your realtor to represent you. In those cases, you will have full representation at no additional cost to you. Choose a realtor with experience in new home/condo sales. Representation can save you thousands of dollars and headaches in the future. Remember that in most cases you do have to have your realtor with you the first time you visit and register at the builder's site/sales centre. This also applies to registering online.

2. Model Homes/Suites. Model homes/suites can be very tempting. They are usually upgraded with all the most gorgeous finishes available. Make sure you ask: what's standard and what's an upgrade. Discuss upgrades you think you'll make with your realtor. He/she may be able to negotiate upgrades on your behalf.

3. Recission Period "Cooling Off Period". When buying a condomium in Ontario, a buyer will have a ten (10) day cooling off period. That means that you can cancel your contract with the builder by giving notice in writing within ten (10) days. Keep in mind that this is not banking days and refers to any ten (10) day period. This applies to condominiums only and homes do not qualify. Discuss this with your realtor, builder and lawyer before signing a firm agreement of purchase and sale for a home or a condominium.

4. The Contract. Builder's contracts are almost always written in favour of the builder. That's the way it is. However, understanding your contract is extremely important. Very often there are additional charges embedded in the agreement. In addition to discussing these additional costs with your realtor and the builder, it is highly recommended that you take your agreement to your lawyer for review. Keep in mind that unless this is a condominium purchase, you will have you write a condition in your agreement for your lawyer to have adequate time to review your documents.

5. Conditions. Discuss this with your realtor. You may want to add conditions for financing, home inspection (depending on the extent of work completed on your home), lawyer's approval, etc... Your realtor can advise you on conditions depending on the circumstances surrounding your transaction.

6. Deposits. The realtors on the Leslie Benczik Team have had success negotiating deposits and timelines for such deposits. This can vary depending on the market conditions and particular builders, however, the deposit structure is an area you may want to consider negotiating.

7. Tarion New Home Warranty. Many new homes today, if brand new and not a conversion project, come with a Tarion Warranty. This is a very helpful program which can bring peace of mind to your experience of purchasing new construction. Depending on the type of home you are purchasing, your realtor can explain the details of your Tarion New Home Warranty to you. While this will be included with your purchase, you may be required to pay the enrollment fee under the adjustments in your contract.

8. Upgrades. This is the fun part! Upgrading your home can be enjoyable! Make sure you go to your design consultation with a plan and a budget. Consider upgrading the things you can not or will not do on your own. Builder's upgrades can be costly, however, things to consider upgrading if it makes sense for your budget are: hardwood flooring, smooth ceilings, fireplaces, kitchen, bathrooms, trim, gas hook ups, bathroom roughed ins (basement).

9. Closing Dates. It is not uncommon for builders to be delayed. Check with your builder on a consistent basis as to whether or not they expect to be on time. This is especially important if you are selling your current home or giving notice to a landlord. There are cases where closing dates just don't match up, so have a back up plan for where you can stay short term if your closing date is delayed at all.

More information is available at www.tarion.com