Buying Real Estate: New Home Considerations
Shopping the new home market can be a challenge. Make sure your interests are protected at all times by having an experienced REALTOR® represent you.
Buyers often do not realise that when they purchase directly from the developer they have no representation. This means no one is looking out for their best interests. The Developer's purchase agreement is typically one sided favouring the developer. For example, did you know:
- Some developments may never complete - your compensation for damages if the development does not complete is minimal if any.
- If your payments are not made on time you could loose your deposit and the developer could also cancel the agreement.
- Completion dates could be as much as two years behind schedule - possibly even later.
- The final in-suite finishes and dimensions can often differ considerably from the orginal plans, show-room displays and brochures shown at the time of purchase.
- If your intention is to assign before completion, be careful! Some agreements may prevent you from assigning.
These are just a few items you might encounter in a purchase agreement. Remember, before you walk into a new developement show-room make sure you have proper representation.
- HST needs to be paid on all new construction. You may be entitled to a partial rebate.
- Developers often require a minimum downpayment of between 10% and 35%.
- Unlike resale homes, the list price on new homes is less negotiable.
- Completion dates can and often do change. The contract will often allow the developer to deliver your unit at a much later date than that specified in the contract.
- Parking is normally considered an extra and not included in the list price. The cost can range from $15,000 to $35,000 depending on the building. It's always a good idea to buy a parking space even if you don't have a car as this will help in future resale value.
Is your new home covered by home warranty insurance and built by a licensed builder? Find out by searching the new home registry: http://www.hpo.bc.ca/new-homes-registry
How should your new home perform? Find out here the Residential Construction Performance Guide.