Having our own house where we can add a sense of style is one of the biggest dreams of many people. Also, the Covid-19 pandemic has made us realise that if we have a roof on our heads, we’re safe. A house is not just a possession but an emotion associated with our friends and family. You can totally imagine the divine feeling of reaching your home after a long hectic day and relaxing in peace leaving the crowd of the city behind. Absolutely, nothing beats the sense of safety of having our own place.
If you haven’t bought your house yet and are planning to buy one in 2021 then you’re at the right place. In this article, we will give you a brief pre-construction house buying guide.
We bet that you didn’t know the fact that every 1 in 3 houses in Canada is purchased directly from the developer or builder. The reason behind this fact is that there are numerous advantages associated with Buying a pre-construction home from a developer.
The benefit of owning the property, customization, less investment and more Return on investment is something that convinces people to buy a pre-construction home in Canada.
Well, when we’re talking about First-time homebuyer pre-construction options, we surely will not leave the cons behind. Of course, every good thing comes with slight discomfort. So, let’s first discuss the pros and cons of Buying a preconstruction home.
Pros of opting First-time homebuyer pre-construction home option
- Better Price as compared to constructed houses.
- Home with a warranty
- You will get More options of personalization
- Less investment of time that you would have been using in finding a newly constructed house.
- More return on investment
- You can rent it out and generate more money from it.
- You can stay with your pets in your own house.
Cons of opting First-time homebuyer pre-construction house option
- You need to pay sale tax on a new home
- You can experience an imbalance in legal consequences
- There are risks like what if the builder doesn’t follow his promises or what if you find a constructed house at a better price.
As you can see the pros of Buying a preconstruction home is more than the cons. Also, when it comes to tax, there are few schemes offered by the government to help people who want to buy their first home. You can read them on the official site of the Canadian government.
Now, let’s understand how you can buy a perfect pre-construct home at a good price.
1.Find the best realtor to help you find the best pre-construction homes
You can’t win the task of Buying a preconstruction home without the help of an experienced and skilled realtor. These real estate agents have a list of demanded and best construction sites at their fingertips since it is their work. They will not only help you to find the pre-construction home but can also get you to avail the best deals.
2. Visit the site and know your neighbourhood
Visiting the project site will help you understand what type of neighbourhood and social amenities you will get. If you’re a person who wants to set up a small home business, then it will also help you to know whether there are possibilities of commercial expansion or not.
3. Check the reputation and past records of the builder
Before you settle for any pre-construction, just make sure that you have done enough research on the development company and their reputation in the market. You don’t want the headache of an unsure builder who already has multiple pending sites. You also don’t want a fake development company, so research before signing any paper.
4. Explore the model home
Touring pre-construction model homes will help you to understand whether there are any chances of upgrading or not. Depending on the features and amenities, you can negotiate with the developer.
5. Be intellectually present while negotiating
If you’ve finally found what you have been looking for, then be intellectual while negotiating the price. Many developers and builders are very reluctant when it comes to dropping the price of the property.
6. Check what is covered by the warranty
Before you sign the agreement paper, read them carefully and understand what the warranty consists of. Since you’re Buying a preconstruction home, make sure that you get a guarantee of on-time completion of the project.
7. Get each detail in written
Make sure that your developer is providing you with a written draft of the contract, the amount you negotiated and the time period they require to complete the project.
8. Sign the APS (Agreement of purchase and sale)
When you sign the agreement of purchase and sale, make sure that you have a valid driver’s license, government-issued ID and chequebook. Your realtor will help you with the signing procedure and answer all your questions, if you may have any.
9. Get pre-approved for a house loan
Since the construction is incomplete, you’re not eligible for a legally registered mortgage. You need to find a financial institution or lender to help you get a pre-approved house loan. Or a commitment letter will also help you to purchase the First-time homebuyer pre-construction house.
10. Cooling off period
During this particular period, your home will be on hold under your or your spouse’s name based on the days this period lasts. You can also take the help of a lawyer to review your agreement.
11. Be ready to cash your first check
If your lawyer has passed the agreement and you’re satisfied with it, you can cash your first check.
12. Home Inspection
It is compulsory for all new houses under warranty to undergo first home inspection before having the tenure transferred to the purchasers.
13. Start working on the upgradation
You can start working on the up-gradation of the house with the help of developers. They will help you to customize, finish and colour.
14. Last but not least, interim occupancy and final closing
The interim occupancy and the final closing both are essential stages during the procedure of closing. During this phase, your developer will let you know that your space is ready for interim tenancy. You can meet your lawyer before paying any occupancy fees or on the day of final closing. Your lawyer will help you signature all essential documents to transfer the ownership to you.
There are a few other factors like the number of family members you live with or your lifestyle to consider while searching for a pre-construction home. Since you’re buying a home, there is no need to hurry, take your time and make a wise decision.