Our Guide to Buying New Development
It’s important to keep in mind that buying “New Development” is much different than buying a previously owned home. Whether you are buying from a sales centre in a new strata complex, or building a custom home, you will be working with a developer/builder.
Some Important Reminders:
Be sure to do your research on the developer/builder. Do they have a good reputation? How long have they been in the industry? Take the time to look up their past projects.
Make sure you know exactly what you are getting in your new home. Find out what is included, standard, and extra in your purchase. Are there upgrades to appliances, flooring, or lighting? Be careful not to be hypnotized by the beautifully staged showhomes! All of the mirrors, built-ins, and furniture are placed in a specific way to make the home seem larger and more appealing to potential buyers.
Make sure everything is in writing. Builders work on multiple homes at a time, and can make errors. This is one of the reasons to always work with your own real estate professional to ensure all the paperwork is completed correctly and your interests are best represented.
Keep in mind that even though the property is brand new, a home inspection is still a good idea.
Pros + Cons of Buying New Development Plus Some Helpful Tips:
In this section we take a deep dive into the Pros & Cons to keep in mind when purchasing New Development.
Everything Is Brand New:
Clean, shiny, and new. When you purchase a brand new home, you’ll enjoy the benefits of being the first owner and enjoy the most up-to-date home designs.
You Can Choose Exactly What You Want:
When you buy new development, you can often choose from a range of floor plans, your location in the complex, the direction you want to face, what floor level to be on, color schemes, and other added features. These customizations allow you to make the home uniquely yours.
Less 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. No renovations required!
You Can Save 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 limited maintenance is required. With brand new appliances, plumbing, heating, and air, you should be repair free for at least a few years.
You Benefit From The 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.
Your home will likely have the latest advancements in construction and design. Think alarm systems, speaker systems, internet wiring, and cable. In turn, this can save you lots of time, money, and holes in the walls.
You will be required to pay GST on top of the purchase price. GST is 5%, which adds up to a steep extra cost. Keep in mind some builder s’prices may say “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 developer’s interests. These contracts are heavily weighted for their benefit.
Unsure on Dates:
Your move-in date will often be pushed back due to setbacks in construction. Everything is an estimation. Buying in a pre-construction condo building can have you waiting up to 3 years depending on the size of the building. Normally townhouse sites are built in phases, each phase or cluster of units will all be move-in ready at different times.
The strata council can change and implement changes altering bylaws manipulating your resale audience.
Prices Are Usually Non-Negotiable:
Developers tend to avoid price negotiating at all costs. The price is usually the price. However, working with a REALTOR®, you can always try to improve the price or even lobby for some upgrades to be included in the purchase price.
Dealing with Construction:
Depending on when you move in, and what location you are moving into, you could be living in a construction zone for the next few months, or even years to come.
Tips: The people working in the sales centres are usually licensed REALTORS® unless they are an unlicensed assistant/hostess. If they are a REALTOR®, they can write up a Contract of Purchase and Sale for you, but they work for the developer and look out for their best interests.
Some people think that if you go into a New Development without a REALTOR®, you will get a better deal. This is not the case. Most reputable developers respect the cooperation of other agents and would never give further discounts based on whether or not you are using your own REALTOR®. They know they need the assistance of outside agents to help sell their developments and would never jeopardize that relationship.
Also note, if you are thinking about buying in New Development remember having a Real Estate Agent represent you costs you nothing. A buyer's agent’s 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 a brand new home.