Buying a brand new house/condo has it’s pros and cons. Ultimately, it’s up to you to decide if it’s the right fit. Here are a few pros and cons that may help when making that decision.
New Home Warranty.
o In British Columbia, all homes built by a developer must have a “2-5-10 year” warranty insurance policy provided to the Buyer. 2 years on labour and materials, 5 years on the exterior of the building (envelope), and 10 years on structure. It is the strongest construction defect insurance in Canada.
o Besides the obvious fact that it will be squeaky clean and shiny, you may have the ability to pick materials, colours, fixtures, etc… Another big advantage, if you’re buying a condo/townhouse, you will maintain the rights to rent it forever, even if the Bylaws change, should you decide to keep it and purchase another property to live in.
Time to Save.
o If the home is a few years away from being finished, this will give you time to save some more money. Most developers require a 5-20% down payment now, but you may have more time to save additional money before your completion date.
Peace of Mind.
o Since everything is brand new, all your appliances, plumbing, heating, etc…will be covered by warranty and more than likely last for years without having to spend any money on repairs.
o Buying brand is usually more money for something even a year or two old. Buildings depreciate in value year after year on their tax assessment, just as houses do. So you will pay a premium for new. Also, nowadays, the price is the price. Like Toyota, most presales don’t budge. “If you don’t buy it, someone else will” mindset.
o Some prices “include” GST, but usually there’s an extra 5% on top of your purchase price. · Developer Contractso Each builder/developer has their own contracts which are designed by a legal team to protect the developer. If there is a discrepancy after it’s finished, chances are, you signed acknowledging you knew it could happen. ·
o New buildings will have a set strata fee established before the building is up and running, but typically after a year, the fee goes up substantially due to the reality of operating costs. ·
Dates Can Vary.
o That contract designed by a team of lawyers will also protect the builder should the construction take longer to complete than estimated. So make sure you have a stable place to live should your move-in date get pushed back. ·
o Check the credibility of the developer and their past work. Sometimes, getting deficiencies fixed after your move-in can be a disaster. Realtors can be a great source of knowledge when it comes to some insight on past projects.
Keep in Mind:
The developers hire their own licensed sales team whose job is to sell YOU! They can write an offer with you as a customer (not client), meaning, they cannot legally offer any advice with regards to the contract. Needless to say, they’re looking out for the developer, not you. There’s always the misconception you will save money because they cut out a Realtors commission. Reputable developers know they need the help of Realtors to sell their product and are very cooperative in working with agents because they rely on them.
Also, a good Realtor will help you dissect the showroom from what you are actually going to get. Sometimes, the glitz and glamour of the showroom adds an emotional appeal. What is the end product actually going to look like? What’s been upgraded in the showroom that needs to be explained?
If you’re leaning towards buying a new home, please find a Realtor to represent YOU! It doesn’t cost you anything and may be invaluable.
We hope this offers some insight and are here to help should you have any further questions.