From Start to Finish Buying an Under-Construction Property

If you are on the market to buying a new home in Canada, you have two options to choose from, pre-existing homes or new construction homes. Buying an under-construction home can be a very exciting and fulfilling experience as it gives you the option to make some changes based on your needs. However, getting the information you need to make a good decision is not always easy. There are many things you have to consider before making your purchase decision. Check out our step-by-step guide to buying an under-construction house and learn what you should know before buying one!

Weigh The Pros and Cons

There are a lot of pros and cons to consider when you are looking to buy a new home, especially one under construction. There may be some cons you can live with; others can be deal breakers.

  • Pros

    • It’s a Brand New Home : Nothing much has to be said further to justify this point. When you buy new build home, everything is pristine. You don’t have to use things that countless others have used before you, and you know you don’t have to make any costly repairs for a long time.
    • You Can Customise Your Home : If your home is under construction, you still have the flexibility to customise the place to your liking. In a pre-build home, you must adjust and mould yourself to that place.
    • Zero-Maintenance Costs : Since everything is brand-new, you won’t have to spend a penny or even think about maintenance for a long time. 
  • Cons

    • The Time Factor : If you do not have the luxury to wait till the home is completed, then an under-construction home might not be for you. There can be unexpected delays which you haven’t even accounted for. 
    • They Cost More : New construction homes will cost more than existing homes. You can get better deals on older homes and negotiate based on age, but you will never see new build houses for sale.
    • Decision Fatigue : You can get overwhelmed by the number of decisions you have to make when you buy an under-construction home. Curtains, tiles, finishes, designs and colour themes are just a few things you will have to decide on. Since many of us aren’t experienced interior designers, this can be taxing.

Find a Reliable Buyer’s Agent

Find a Reliable Buyer's Agent

Navigating the complicated process of buying an under-construction home can be nerve-wracking. It is always better to hire a buyer’s agent to represent you. Looking for someone who has extensive experience with new construction homes to guide you through the process and recommend things that will help avoid any pitfalls in the process. This will take a huge load off of you and help you focus on other aspects of the process.

Research Neighbourhoods and Builders

Do extensive research on the neighbourhoods and builders. Take some time and visit your potential future neighbourhoods. Explore, and see if the new neighbourhood will be a good fit for you and your family. If you have kids, research schools in the area and check your proximity to essentials and other amenities. The same goes with builders too. Research them online, check their reviews, and if they have any new build houses for sale nearby, ask if you can visit the property. You will see their quality of work and if they adhere to building codes. See if they are the right fit for you, do they understand your vision, and if they will work towards it.

Work With a Lender That Is Experienced With New Construction

Work With a Lender That Is Experienced With New Construction

Loans for new construction homes differ from traditional mortgages, and not every lender offers them either. Your buyer’s agent or your builder would be able to guide you or recommend a lender who gives loans on new construction. You are also free to do your research, but it is always better to use the expertise and connections of your buyer’s agent and builder, who have been doing this for a long time.

Research Builder’s Developments

Not all builders are the same. If you have narrowed it down to a builder you feel is the right fit for you, research their previous projects. It will give you a good idea about what you can expect while working with them. If possible, get in touch with homeowners who have worked with the builders earlier to get some first-hand feedback about the builders.

Understand The Purchase Agreement

Understand The Purchase Agreement

Before you buy new build home, ensure you understand the terms of the purchase agreement. The first thing to do is go through the purchase agreement’s fine print and understand it properly. The more you know about what you’re signing, the better prepared you’ll be for any surprises along the way. You should also familiarise yourself with any addenda or other documents that come with the property, such as disclosure statements or easement agreements. If any terms don’t seem clear, ask the seller for clarification before signing anything. If necessary, speak with your attorney about these terms and whether they would be legally enforceable in court.

Choose Your Home’s Style

The design phase is probably the most exciting part of the entire process. Since this is a new construction homes, you can customise it to your liking and match your lifestyle. You have loads of options to choose from. Take your time, and do your research before you finalise everything.

Get a New Home Inspection

Get a New Home Inspection

Inspections are crucial steps that you should get done to ensure that everything is up to the latest building codes. You may think that since the house is new, you can skip this step. However, getting a final round of inspections done will pick up things that your builder may have missed, which should be taken care of before you take possession of your new home.

Sign and Review The Warranty Documents

A warranty document will provide insurance and protection against any defects in your home. The developer takes this out, and it protects the owner for 10 years. It is crucial to go through the document with a fine toothcomb before you sign the document.

Close The Deal

Close The Deal

The most anticipated step of the entire process. Once all the inspections are completed, all documents signed and all outstanding payments and deposits are made, you can finally take ownership of your new home and move in. 

Summing It Up

Buying a new construction homes can be a rewarding experience, and it’s worth the wait. Don’t get deterred by the lengthy process or the tsunami of decisions you will have to make along the way. Do your research, take things step by step, and you will be rewarded with the brand new, bespoke home of your dreams. 

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Frequently Asked Question (FAQs)

What is the 1st stage of building a house?

Assuming that you have already researched the best neighbourhood for you, bought the plot and have the design of your home ready, the first step of the building process is to get your site ready. This can include clearing vegetation, levelling it if required, and having the necessary utilities for construction.

How do you buy a prefab home in Ontario?

Buying a modular home is similar to buying a traditional home. The only difference is that your home is built in a factory and assembled on-site.

Do you pay a premium for a new build?

Yes, builders charge you a new build premium for a newly built home.

Can you negotiate a new build home?

Yes, there is always room for negotiation in a property deal. You just have to play your cards right.

Is buying pre-construction a good idea?

Buying pre-construction does have its advantages. It works to your benefit financially; you are paying today's construction rates for a property that will be finished anywhere from 3-5 years. There is no rush compared to finished projects where time is of the essence, bidding wars are going on, and your investment would have appreciated even before you moved to your new home.