Newly built or pre-construction homes are the house of choice for many homebuyers. Why? Most people want modern features and the ability to customize their home during the construction process as the top reason for choosing a new build. There’s also the use of energy-efficient materials and systems to up the appeal. However, buyers caught up in the excitement of a brand new, never-lived-in home can overlook some important details that affect their bottom lines. Here are some important things to know when buying a new home:
Buying Into Half-Finished Developments: there are a lot of developments out there that are currently half-built. It’s possible that you may be buying into a development that may never be fully completed—or may take a long time to finish. The very rare, worst-case scenario: you’ll be stuck with an unsellable house in the middle of an unfinished community. In the bottom of the market, many developments only have 10 of the 40 lots have houses already built. The other 30 lots are giant plots of dirt. Though it may seem like a good idea to you now, it will become difficult to resell if you need to move before the entire community is completed. You need to ask specific questions about the number of lots sold and currently under contract. You may want to reconsider being the first or second out of 50 and buy in a later phase when there’s more certainty.
Being Hypnotized By the Picture-Perfect Model Home: want to know one of the secrets of the new home trade? When buying new construction, you almost never ever get to see your actual unit. You see a model that is similar to the floor plan to the home or apartment you are purchasing. Those model homes are always decorated and dressed to look magnificent. The developers and designers employ all kinds of techniques to make the model home appear bigger than it is. Often times they have furnished and staged them with slightly smaller-scale furnishings to make the rooms look bigger.
Going With the ‘Flow’ of a Model Home: builders often employ a technique in their model homes to give the place more ‘flow’ when they move most of the interior doors between rooms to give the model home a much greater feeling of space and an open floor plan.
Not Knowing What’s Included vs. Extras & Upgrades: what’s extra? Find out exactly what upgrades are—and are not—included in the price you are being quoted. For example, you may think you’re getting an incredible deal, but what you didn’t think to ask was if the finished basement and gourmet kitchen are included. And, the walk-in shower isn’t included in your basic package. Once you start adding in those ‘wow’ elements, the price can skyrocket from affordable to out-of-your-budget.
Going on an Upgrade Shopping Spree: be conservative about which and how many upgrades you select. Determine what you can live without or do on your own later. Just as with any retail business, builders make profit on the upgrades. Don’t get caught up in the frenzy and throw your budget out the window.
Not Getting a Completion Clause: when’s it going to be finished? When purchasing new construction, you are on the builder’s timeline. What is the date of completion of the house? Does it coincide with your needs? Make sure you get a cancellation clause or a refund of deposit clause if the builder does not complete by a specified promise date.
Ignore Previous Phases: looking at the new homes in phase two of a development? Go back to phase one. You may be overlooking a better deal. And you may be ignoring a lot of information about the builder/developer that could be very useful. If you are buying in a community that is in phase two or higher, then talk to some of the homeowners who bought in phase one. How easy was this developer to deal with? Any suggestions or advice? In addition, notice if the phase one neighbourhood is already, established with grown-in landscaping and completed homes. You might prefer that to a future phase surrounded by bulldozers, infant trees, and blowing dust.
Not Carefully Reviewing the Surrounding Homes & Neighbourhood: when buying new or pre-construction homes, you have the ability to pick the lot and the location of your home. However, can you see the neighbourhood completed in your mind’s eye? Will the house that is yet to be built next door blocking your view? How close will your neighbour’s be? Will your living room end up looking into one of your neighbour’s bathrooms? Keep this all in mind. Also, consider the surrounding neighbourhood. Are these shiny new homes surrounded by a rough neighbourhood? Make sure you love it all before making your final decision.
Waiving Your Inspection: just because you’re buying a brand new home that is in the process of being built from the ground up, it’s a huge mistake to try and save a few hundred dollars and bypass the inspection process. It’s a good idea to get an expert’s eye on a new home as it is being built. And if you can, have someone check out the house-in progress. Get someone who can identify potential problems. You can oftentimes hire an inspector or an outside contractor to stop by the property and then pay him or her an hourly rate. It is money well invested.
CENTURY 21 Miller Real Estate Ltd.
Brokerage Independently Owned and Operated
#4 Office in Canada
By Production CENTURY 21 Canada 2013
467 Speers Road,
Oakville, ON L6K 3S4