Top 10 Mistakes to Avoid When Buying a New Construction Condo or Home
Wednesday Apr 26th, 2017
Buying a new construction home, whether a condo, townhouse or detached is a bit different then buying a resale. 10 Mistakes to watch when buying a new build in Toronto:
Mistake #1: They fall in love with the model home
Most people fall in love with the model, but you have to realize that everything you see in that model home is often an upgrade. Upgrades are a major portion of a builder’s 10% to 20% profit margin.
Mistake #2: They trust the floor plan
Condo sales will often include balcony or terrace measurements as part of the total square footage. New home sales staff will provide square footage based on measurements of external walls. You can’t rely on their verbal assurances, on the floor models, or on the sale pitch or brochure.
Mistake #3: They don't get their lawyer review the contract
Whether you’re buying a new detached home or a condo, the purchase agreement is the legally binding document that spells out what you’re getting and the conditions of the sale. It’s full of fine print and legal-speak, and if you sign without legal representation, you risk being bound to terms you don’t understand or don’t want.
Mistake #4: They don’t bother with an inspection
During the new home buying process there are two specific times when it’s important to have your home professionally inspected. The first is the pre-delivery inspection, a mandatory walk-through for all new homes under warranty. This inspection takes place with your builder shortly before you officially take possession of your home. The second inspection should be scheduled for about one month before your home warranty expires. In Ontario the first and broadest portion of your warranty expires 12 months after your possession date,
Mistake #5: They accept delays without a fight
The law is now clear and critical dates are now included as part of the purchase agreement and contract. If a builder misses these critical dates and requires an extension, a buyer can either agree, and seek compensation, or simply get out of the deal. Seek legal advice whenever you’re presented with a request to delay a critical date
Mistake #6: They forget they are moving into a construction zone
Anyone considering a new condo or home purchase should take into consideration the impact of ongoing construction. It maybe noisy, everything is dusty and the air quality could be horrible. Combine that with the fact that the whole area is incomplete for quite a long time and that access points can open and close, depending on the phase, and you could have a recipe for long-term aggravation.
Mistake #7: They think they have a warranty—but they don’t
Buyers should be proactive and get their new home warranty in writing. They should also go online to determine if their builder is registered with a provincial regulator as a new home builder. This is particularly important for loft or condo conversions—residential units constructed inside an existing building shell. In such situations, new-build warranties often don’t apply.
Mistake #8: They’re not speedy with their warranty claims
To ensure you understand how long you have, carefully read the package you get during the pre-inspection, as there are different deadlines for different types of warranty claims. Get a calendar and mark down those deadlines, and then make sure you get the claim in at least five days before the deadline.
Mistake #9: They’re ambushed by hidden closing costs
When you sign the agreement of purchase and sale for your new place, many of the closing costs are estimates. These costs often escalate as you approach your possession date.Try and pay close attention to the adjustments and get a cap on certain items and remove others.
Mistake #10: They don't hire their own Realtor to represent them
The Builder's sales agents are paid to represent the builder, regardless of what they may tell you. Many will use high pressure tactics to persuade you to sign the contract. Get your own agent to make sure you get the best price on your purchase
Buying or selling a home in the Greater Toronto Area can be expensive and come with many uncertainties. However, by hiring Wafa & Jalila as your Toronto Realtors, they will watch out for your best interests and assist you in investing your money wisely.
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