Pros + Cons of Buying New Construction (plus a few tips)
Investing in new construction can be rewarding and hurtful at the same time. Let’s compare the pros and cons of buying a brand new home.
- Everything is brand new
- Clean, shiny, and trendy floor plans that have never been lived in is definitely an appealing factor compared
- Picking exactly what you want.
- Buying new development has options of floorplans, wherein the complex or building you want to be, what direction you want to face, what floor level to be on, color schemes, and adding extra features. They are a great way to customizing exactly what your dream home consists of.
- No work for you!
- With new construction or pre-construction purchases, the work is done for you. You don’t have to lift a finger, a paintbrush, or a hammer.
- Saving Money
- Depending on the developer, they require anywhere from 5%-20% of a down-payment, but that is all you pay until completion. This can give you lots of time for saving.
- A big financial benefit of new properties is that you won’t have to do much maintenance. With brand new appliances, plumbing, heating, and air, you should be repair free for at least a few years.
- New Home Warranty
- The new home warranty covers all new homes built in British Columbia. You get 2 years on labor and materials (some limits apply), 5 years on the building envelope and 10 years on structure. It’s the strongest construction defect insurance in Canada.
- New Technology
- Your building will be made of the latest and greatest advancements in construction and design. Think alarm systems, speaker systems, internet wiring, and cable – saving you lots of time, money, and holes in the walls.
- You must pay GST on top of the purchase price. GST is 5%, which adds up to a be a steep extra cost! *Keep in mind some builder’s prices are “including GST” but at the end of the day you are still paying for it.
- Contracts benefiting the Developer
- Any contract you sign from a sales office was written by a very educated and determined legal team to protect all aspects of the developers behind. These contracts are heavily weighted for the developer’s benefit.
- Unsure on Dates
- Your move in date can be pushed back typically, not fully ensuring an exact move-in date. Everything is estimations. (With usually on 30 days notice!)
- It is a waiting game! Buying in a pre-construction condo building can have you wait up to 3 years depending on the size of the building. Normally townhouse sites build by phases, each phase or cluster of units will all be move-in ready at different times.
- Unestablished Strata
- The strata council can change and implement changes altering bylaws manipulating your resale audience
- Prices are Non-Negotiable
- Developers tend to avoid price haggling at all costs. The price is usually the price.
- Dealing with Construction
- Depending on when you move in, and what location you are moving into, you could be going to be living in a construction zone for the next few months, or even years to come.
- The people working in the Sales Centres are usually licensed Realtors unless they are an unlicensed assistant/hostess. If you do not have a Realtor, they can write up a Contract of Purchase and Sale with you, but they work for the Developer and look out for their best interest. Some people think that if you go into a New Development without a realtor, you will get a better deal. This is not always the case. Most reputable Developers respect the cooperation of other agents and would never give further discounts based on not using a Realtor. They know they need outside agents help in selling their product and would never jeopardize that relationship. Most New Developments are sold with the help of at least 60-70% outside agents sometimes even more.
- Know what is included, standard, and extra. Do not get hypnotized by the beautifully staged show homes! All of the mirrors, built-ins, and furniture is placed in a specific way to make the home seem larger and more appealing. Ensure you know exactly what you are getting in your new home. Are there upgrades to appliances, flooring, or lighting?
Also note, if you are thinking about buying in New Development remember having a Real Estate Agent represent you costs you nothing. A buyers agent commission is always paid for by the Seller. Having proper representation when buying a home is very important and you should be made fully aware of all the risks when purchasing.
We hope this helps with your decision of buying New Development! If you have any questions, please don’t hesitate to ask!