7 Things To Consider When Buying A New Build House In Canada
Buying an existing home can be easier than buying a newly constructed one. But existing homes aren’t always as accessible and rarely as efficient as new homes.
You may feel particularly attracted to buying a newly built house in some areas. They are a great way to ensure your new home is the “perfect fit” for you and your family. But if you want your new house to be a dream home, you will need to avoid the common mistakes that homebuyers make. These mistakes lead to unnecessarily wasted money.
Buying A New Build House In Canada Like A Pro With These 7 Steps
1: Improvements That Add Value
The freedom you feel when choosing your home’s improvements can be exciting. The catalogues for add-ons are pretty and comprehensive. But when buying a new home, it’s easy to get carried away and spend more than you would have if you had purchased an old house.
When considering add-ons for a home that will become your primary residence, it pays to focus on improvements that add value. Typically, that means spending less on appearances, except where those appearances also add value.
One of the best examples would be upgrading linoleum flooring to hardwood or vinyl flooring. This simple upgrade will both improve appearances and the value of the property.
Overall, an improvement that raises the value of your home can always be at least partially justified. Investments like new and more efficient air conditioning or heating are always valuable. But many improvements that look pretty will never provide you with a return on investment.
Remember, you want a new house, not a model house.
2: Home Inspection
A home inspection is not required, but it is highly advisable, especially for new builds. A private residential home inspector will ensure you get both a quality and a defect-free house.
Your house might be brand new, but that’s no guarantee that it will be defect-free.
It will help if you consider making your purchase contract contingent on a thorough inspection of the newly built property.
Municipal code inspections are usually far less comprehensive than private, professional inspections. The right inspector will catch abnormalities that you would typically miss.
Most builders are used to inspectors investigating their work. You may even want the inspector to come at the end of each significant building phase. But if the builder objects entirely to inspections, that’s a sign that there may be something worth hiding.
3: A Home Warranty
You should also consider a good home warranty for the same reasons you want an inspection. Even with a skilled builder that goes through a check, some problems may still arise later. It may even take years for any mistakes to materialize in your home, making a home warranty ever more critical for the newly built home.
You need this warranty if you seek a mortgage loan to finance the construction of the newly built property.
Home warranty varies, but the longer yours is, the more likely you will use it. Most home warranties cover major construction defects. Make sure you’re satisfied with the home warranty before taking possession of the house.
The warranty should state what is covered and not in explicit language.
4: A Better Mortgage
Another major mistake some home buyers make is not looking around for a better mortgage.
If you go through a builder to build a brand new house, they will generally have either an in-house financing service or lenders they work with regularly. Unless you compare their rates to other lenders, you cannot know if you’re getting a fair deal.
When going through new construction mortgage options, you often need to be careful with the builder’s recommended lender.
Lenders that work with builders frequently make their offers look better than they are. For example, they may offer you a $10,000 incentive for choosing them. That sounds good for a moment, but if their interest rates are even a quarter of a percentage point higher than another lender’s, you’ll end up paying that “incentive” back and then some.
The point here is that you never know until you ask. Look around for different lenders and review their offers for the best rates and terms.
5: A Professional Builder
We’ve talked about issues relating to your builder but not your actual builder. There are several mistakes that many homebuyers make when choosing and working with builders.
Researching builders isn’t fun or straightforward. There are many builders in the industry, and most are pretty busy, even providing you with detailed information about their past projects. But it’s possible to find everything you need to know on Google.
If you’re unsure which, local builders would be right for you. It’s worth the time and money to consult a real estate agent.
You can find information on builders through online reviews and testimonials. You can also connect with many of them on social media. Builders will show their work to their followers. Most good and reputable builders are happy to discuss their work with you. Even if they don’t have a growing online presence, they will still be glad to answer your questions and discuss your options.
6: A Better Deal
Next, many people aren’t aware that countless things in life are negotiable. Many home buyers think negotiating with a builder is rude or impossible. That’s simply untrue.
Builder’s compensation comes in many forms, and there are usually areas where they are open to negotiation. This is a large part of a real estate agent’s job. They negotiate with builders on individual fees all the time. Builders often pay agent commissions, so getting a pro negotiator doesn’t need to cost you.
Overall, you need to ask to get an answer. If you don’t want to negotiate with a builder, either yourself or through an agent, you will never know if you could have saved much money.
7: Your Neighbourhood
The thrill of having a new house built for you can distract you from some of the more practical elements of homeownership. Regardless of how nicely your home is made, a massive chunk of its value is attached to your new neighbourhood. Location is everything, and no builder can help you ensure your whole neighbourhood will develop in an agreeable direction.
Regardless of whatever else you try to get from a new house, remember to pay attention to the neighbourhood. Pay attention to connections to major routes and public transportation. Assess the local school district and check out all the local amenities.