July 28, 2009
Building a condominium, townhouse or house is a complex process; and, the process of actually purchasing a new home should be almost as complex. Think about the amount of money you will be spending! It is easy to get caught up in the incentives, low interest rates, and minimal down-payments and to forget the scale of money that is actually being committed. People speak about the investment advantage of purchasing a new home, and the potential earnings from this investment; but, for most people, they will be investing their entire life-savings. This process should not be taken lightly, and the more research you complete, the happier you will be. Take your time, ask the right questions, be meticulous, and understand the process.
7 Helpful Hints for purchasing a newly constructed home:
1. Research the builder.
Look at their track record: check out their ratings from your local home-builder association, and provincial/state warranty program (such as Ontario’s New Home Warranty Program, Tarion), talk to previous purchasers, visit some of their previous buildings, and find out how long the builder has been in business. Do not be afraid to ask the builder for references of previous customers, and call them to find out their satisfaction level with the building and their purchase experience.
2. Check out the neighbourhood.
Spend some time in the neighbourhood and in very near proximity to the home of interest; walk around, go for a meal in a nearby restaurant and just spend time hanging out. Research the local schools, transit routes and parks. Check out the sources of noise pollution. I live in a building that is near the heli-ambulance route, luckily, Diamante Development builds buildings with excellent glazing systems, and I cannot hear the helicopter when I am inside my unit. Is there a subway, train or street car nearby? Are there large hydro lines near the building? Maybe there is a building next door with a noisy make up air unit? Spend time researching these potential issues and then ask the builder what has been done to mitigate any issues that you haved sourced.
3. Check out the neighbourhood for amenities, but if you are buying off-plan remember that the neighbourhood may change between the time of purchase and occupancy.
Again, using my own experience as an example, in the past 12 months a the grocer Longos has opened up in my building and an AMC 24 opened up down the street. Two amazing bonuses that I did not know about at the time of purchasing! Often new home development projects include space and plans for retail stores and shops. Take note of the nearby amenities but also keep in mind that some of the best amenities may still be in the planning stage.
4. Make sure you know if your building is new construction or a retrofit.
Ask your lawyer what the difference is, because when it comes to your Tarion warranty, there are differences.
5. Understand the unit layouts.
Sit down with the sales representative, and make sure you fully understand every aspect of the layout and how the plan works for you. A good builder may spend months perfecting each layout, and their sales staff should know, in depth, the ins and outs of each plan. Understand the glazing systems, the potential for changes, and the sizes of rooms. Make sure the layout is efficient, and liveable. If your friends live in condos, check out their layout and determine your likes and dislikes.
6. Review the Agreement of Purchase and Sales Agreement with a lawyer in detail before you sign.
Remember, in Ontario, you have a 10 day “cooling off” period, so study this document well! Understand the closing costs and the potential for delays. Ask your lawyer if there is anything unussual that you should be aware of. You are considering a major purchase; understand what you are signing!
7. If you are invited to visit the construction site, and/or your unit, take advantage of this opportunity!
Watch you new home being built, and ask questions! If your builder hasn’t invited you, then call them up and ask for a tour.
Buying a home off a plan is a fun experience, but there is a lot to learn and a lot of due-diligence to be performed. The more research you do in the purchasing phase, the happier you will be with the overall process.
Matthew [at] buzzbuzzhome [dot] com
President / Founder