What Do I Need to Know Before Buying a New Construction Home?

What Do I Need to Know Before Buying a New Construction Home?If you're considering a new build for your next home, there are some things you need to be prepared for in the process because it is distinct from other home buying processes. New construction homes for sale in the GTA can be a dream come true, allowing you to own a brand new home that comes with a warranty, updated finishes, and a totally move-in ready status. Before you buy a new construction home, make sure to find out about these things to avoid stressful or unpleasant surprises. 

Understanding Your Budget and Financing Options

Buying a new build can differ a bit from buying an existing home when it comes to setting your budget and securing financing. Start by talking with multiple lenders to secure mortgage pre-approval, and then factoring in anything you will need to save for on top of the monthly mortgage costs. 

Consider factors such as down payment requirements, mortgage rates, closing costs, and anything that may not be included in the home but will need to be purchased. Many new builds do not include fencing, landscaping, window coverings, or appliances, so it's important to factor this expenses in. 

Depending on the builder, you may also have the opportunity to customize and upgrade the design. These expenses will likely be included in your mortgage, but can quickly add up and change your ability to qualify for the mortgage or the affordability of the mortgage payment. Ask plenty of questions about the cost of every upgrade, what standard options are included, and whether there are any financial incentives or benefits offered by the builder (sometimes builders offer this for using their preferred lender or choosing certain lots, for example).

Review the Community Guidelines and HOA Rules

Most new construction homes are built in communities that are also new, and will be managed by an HOA. Before you sign a contract to build, make sure you understand what the HOA fees are and what they cover, such as maintenance of common areas, amenities, and community services.

You will also want to review the HOA's architectural guidelines and rules regarding property use, landscaping, and exterior modifications. Make sure that any future plans you have for remodeling, renting out your home, or anything else won't conflict with the HOA guidelines. 

Inspections for a New Build

Some buyers neglect to have a new construction home inspected because they assume it is in perfect condition. Keep in mind that while the home is brand new, that does not automatically mean it's perfect. There is always a possibility that a mistake was made during construction, and was either not noticed or was intentionally ignored. 

Having an inspection done gives you a chance to address any flaws in the construction with the builder before closing. Don't miss your opportunity to let this be the builder's responsibility before it becomes your own. 

Most builders will also include a warranty, which is customarily a year long and covers all of their work (though not usually the appliances of materials that are under manufacturer warranty). Get all the information about the builders warranty before you sign the contract so you understand what it will cover. 

Timeline and Communication

Each builder will have their own processes for communicating any changes in timeline, including delays because of supplies, being ahead of schedule, or anything else. Find out how your builder will communicate and whether they tend to complete work on time. 

Ask the builder or developer about the construction schedule, milestones, and potential delays. How do they communicate when things don't go according to plan, and at what point can you check in during the building process? Will you be able to see the home during the construction process and are you only allowed on site according to a certain policy? Some home buyers assume they can stop by any time but are actually prohibited for insurance and safety reasons. 

Ready to find your home in the GTA? Contact us any time. 

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