Buying a new home is an exciting time. You can pick almost every aspect of your new home, from the kitchen drawer handles to bathroom fixtures. Every aspect of your new home can be customized to meet your dreams. However, is buying a new construction home the same as buying a resale home?
Market Influences & Picking A Builder
When the market is favouring buyers in the regular re-sale market, that advantage will almost always translate into the new home construction market.
Builders will be competing against other builders and may start to offer incentives or rebates to new clients. Occasionally, you may also be able to pick up “spec homes” at a somewhat discounted price. These are homes that either the builder built for re-sale or another client had built and didn’t complete the deal.
What Are The Extra Costs?
Pre Construction
- The deposit structure will likely be different than a regular home; some builders require multiple deposits at various stages of the build. It is not uncommon to see deposits range from $40,000 to $80,000.
- Make sure you double-check the deposit process.
- Who holds the money?
- Is it held in trust?
- What is the return policy if you change your mind?
- Registration Fees – some local or provincial registration fees could apply. Not all homebuilders will cover those costs. When looking specifically at condos you will need to prepay some condo fees.
What You See Isn’t What you Get
- If you visited a model home during your home search, the finished product you saw was likely filled with various upgrades.
- Make sure you have a clear idea of standard vs upgrade.
- Ask to see previously completed homes for a great comparison. This will also allow you to speak to people about the builder and how happy they were.
- Sometimes it’s more economical to go with the builder’s basic finishes and budget for upgrades in the future.
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The Finished Home
- Here are some items that you will need to have for your new place:
- Window coverings
- Rugs & matts
- Appliances
- More furniture if you are moving to a bigger place
- Garage door opener ( not always included)
Outside
- You will need to have landscaping done and may even need a lawnmower and gardening tools if you come from a condo.
- Fences & deck, sometimes a deck is included, rarely a fence. Once the builder has finished grading, and all your neighbours have moved in, you may be able to share this cost.
So as you can see, the costs could add up quickly. Proper budgeting and planning is key. Some of the larger items, like a fence or maybe even finishing a basement, could potentially be included in a mortgage if you borrow more funds.
Most importantly, as with any real estate transaction, ensure you are adequately represented by people who know what they are doing.
Happy House Hunting & Selling
Want more details on the current market? You can find more details on the current market here: London & St Thomas Association of Realtors.
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Want more details on the current market? You can find more information about the current market here: London & St Thomas Association of Realtors.
