Buying a new construction home in Ontario comes with many benefits, including modern design, energy efficiency, customization options, and brand-new-everything!
However, it’s a different process from buying a previously owned home, so it’s important to know what to expect. Here are 5 key things to keep in mind, presented by Hamilton’s leading new home builder, Multi-Area Developments:
1. Research Your Builder
Before buying a new construction home, it’s important to do your homework on the builder. You can visit their completed communities, look at their future development plans, follow their social media, or look at their customer testimonials. You’ll also want to carefully review the Agreement of Purchase and Sale (APS). This legal document outlines key details like your deposit structure, closing dates, possible construction delays, and your rights if you need to cancel.
2. Plan Your Finances
There are a few financial details that are unique to buying a new home, so it’s important to be prepared. Here’s a quick rundown:
- Deposit: New homes often require a larger deposit than resale homes, and it’s typically paid in installments.
- Closing Costs: Be aware of potential additional costs, like development charges and other fees.
- GST/HST: Understand how these taxes apply to new home purchases and if you’re eligible for any rebates.
- Mortgage Pre-Approval: Getting pre-approved is always important, but it’s especially crucial with new homes because there’s often a long gap between signing your contract and closing. Keep in touch with your mortgage provider throughout the process to ensure everything stays on track.
3. The Tarion warranty
The Tarion warranty offers important protection for new homebuyers, covering defects in workmanship, materials, and structural issues. Here’s what you need to know about the three warranty periods:
- One Year: Covers defects in workmanship, materials, and unauthorized substitutions.
- Two Year: Covers issues like water penetration, heating, and electrical systems.
- Seven Year: Covers major structural defects.
Understanding these warranty periods will give you peace of mind as you settle into your new home.
4. The Pre-Delivery Inspection (PDI)
The Pre-Delivery Inspection (PDI) is an important step before taking possession of your new home. It’s crucial to conduct a thorough inspection with your builder to identify any issues. You can use the Tarion PDI checklist as a guide. Be sure to document any deficiencies you find and make sure the builder addresses them.
5. Interim Occupancy (Condos)
If you’re buying a pre-construction condo, it’s important to understand the interim occupancy period, where you can move in before the final registration is complete. During this time, you may be required to pay interim occupancy fees, so it’s a good idea to factor this into your financial planning.
Finding the perfect home takes time, but with careful planning and preparation, you’ll be well-equipped to navigate the new home process and achieve your dream of new homeownership in Ontario. If you’re considering a new construction home in Hamilton, contact our team at Multi-Area Developments today.
