Advice on Buying a Brand New Home

If you are thinking about buying a brand new home, there is a lot to be excited about. Builders offer a great selection of homes, the range of design and features is incredible, and mortgage rates are low. Now is a great time to buy!

While enjoying the excitement of looking for your new home, you also want to be well prepared for making one of most important investments of your life. Here are some suggestions from professional new home builders to help you make informed and confident decisions.

Set your budget early. Find out from your financial institution how much of a mortgage loan you qualify for and get pre-approval; this can often be done online. With today’s low interest rates, you may be pleasantly surprised at the amount you can borrow. Be realistic about how much you want to spend on your home.

Include room for “extras” in your budget. Chances are that you will want to add some upgrades and extra features to the builder’s standard model. You also need to set enough money aside to pay “transaction costs”—e.g. mortgage application fees, lawyer’s fees and land transfer taxes.

Make a list of your needs, wants and “would-likes”. This sounds easy, but you may be surprised how helpful it can be to write down your ideas, particularly if you have to reconcile them with other family members. A home search can be time-consuming— there is little point in looking in the wrong areas or at homes that won’t work for you.

Research the builders. When you buy a new home, you also buy the builder’s expertise and reputation. That’s why it is so important to buy from a reputable builder. Contact your local Home Builders’ Association for the names of professional new home builders. Also verify that a company is registered with a third-party new home warranty provider and check with previous customers to determine their satisfaction with their homes and the builder’s service.

Know what you are getting for the money. No two companies are alike. Brick siding on the front may be standard with one, while it costs extra with another. You may get a shelf with your fireplace, or a full mantle. And so on. Go through each builder’s sales package to find out what is included in the price, and when in doubt, ask the builder or salesperson to explain.

Know what the builder’s standard features are. Most model homes are “dressed up” with upgrades and extras to give you ideas for “personalizing” your home. Ask to see the standard features (e.g. carpeting, vinyl flooring, cabinets and tiles). Also note what brand-name products the builder is using and what manufacturers’ warranties come with them.

Check out the lots. Developments may have restrictions on the location of individual home models in order to ensure a varied and attractive streetscape. If you are buying from models or plans, have a close look at the lot(s), considering such aspects as light and sun patterns, traffic, noise, privacy and so on.

Find out about the builder’s warranty and after-sales service. Ask the builder or salesperson if your deposit is protected, and for what amount. What happens in case of completion delays? What if there are defects after you move in? Professional builders have an established after-sales service program; they’ll also enroll your home in a third-party warranty program.

Compare, compare, compare. Most often, homebuyers go through a process of elimination to narrow down their choice to the right home. Make sure you compare value, not just price. Consider the quality of the construction, the products and the systems. Look at the features as well as the quality of the finishing. Think carefully about the “intangibles”—the reputation of the builder, their service and their commitment to customers.

Have a lawyer review the contract before you sign it. A builder’s sales contract can run several pages or more with the inclusion of plans, specifications, “standard clauses”, covenants and restrictions, and so on. Make sure you read and understand everything, and ask your lawyer to go through the contract before you sign.

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