Notes For Buying New Construction
In Durham Region, it seems as though there is a new construction community on every corner. Buying a new build has many perks, but can have just as many downfalls. Should you buy a new construction home? Before jumping into a new build with both feet, here are a few things to consider:
Not A Lot Of Room For Negotiation
Most mass new construction builders will hold firm on the base prices of their homes. Unlike buying a resale home, you likely won’t be able to get them down on the starting price. However, this doesn’t mean that there aren’t negotiations to be had. The upgrades are a great place to put your negotiating skills to work and have them include different features for a lesser amount.
Stay In The Know About Upcoming New Construction
As mentioned above, the base price on a new construction home is usually pretty firm, but there are ways that you can cash in on a good deal. Getting into a new development in the first phase will get you the best bang for your buck. You will often get the lowest base price with cash incentives on upgrades and add-ons.
The downside of buying in the first phase is that you have to live through multiple additional phases of construction which can take years to finish, so it’s just something to be cognizant of.
Don’t Believe What You See
When going through the new build process, you will tour a model home before deciding on your exterior elevation and upgrades. Looks can be deceiving. Model homes are full of upgrades that are designed to upsell you.
Tour the model home with an open mind and be flexible to the possibility that you won’t get 100% of your desired upgrades within your price range. Homeownership is full of sacrifices and you may need to compromise by putting carpet in the bedrooms for now, and plan to upgrade to hardwood in 3-5 years.
Do Your Research Regarding Future Development Plans
Many new developments are often just the start of infrastructure in the area. Do your research, talk to the builder, reach out to the municipality and find out what the future plans are for the area. This will help you to land in a neighbourhood that will fit your wants and needs long term. Besides nothing is worse than thinking you bought a nice home on the edge of town, only to find out that you are the first neighbourhood in a rapidly expanding area.
Shop Around For Your Mortgage
Buying a new build shouldn’t change the way you look at securing a mortgage. Homeownership can be costly and many of the rules for first-time homebuyers still apply when mortgaging a new construction home. You will want to make sure that you talk to a trusted financial professional to get a sense of what you can afford and will be approved for in a mortgage before even looking at a new development.
This is even more important as with many new build homes, you are paying installments at key milestones but won’t actually have a mortgage come into effect until you take possession of the home.
Get Everything In Writing
This is extremely important when going with a new build. You will want all of the information about upgrades, warranties, guarantees, timelines and more in writing. Before signing anything, make sure that you are satisfied with all of the information that has been provided to you. Review your documents with a fine-tooth comb and don’t be afraid to involve a real estate professional or even a lawyer to make sure you’re protected.