Thinking about buying a new build? Read this first.
Lately, I have had a myriad of questions from people who are interested in building their dream home and want some advice about avoiding costly and heartbreaking mistakes.
Being through the process a few times, I thought I would offer up some of my best tips.
When in doubt, Enlist the Help of a REALTOR®. Prior to contacting your builder, consider having an experienced real estate agent accompany you to the show home and introduce you to the Builder’s representative. When you enlist my help, you’re not just gaining support to buy – you will be gaining an ally who is on your side and experienced in helping buyers with the home building process. Depending on the Builder’s policy, I may continue to get involved in the sales process. I can help guide you through every step of the process, explain the current market, navigate complex paperwork and offer invaluable advice.
Understand Your Contract. Take the time to read through your contract so you can better understand the process. When you enter a contract with a home builder, you are investing huge sums of money towards the project, however, just because you signed and committed yourself does not mean that you have no rights. Know your legal rights and feel free to use them. To protect your interests and ensure that the builder performs to your satisfaction, you should speak with your own lawyer and review the building contract before signing.
Consider Hiring Your Own Lawyer. Many builders will offer to pay your legal fees if you use their lawyer and buyers are often attracted to this offer since it saves costs, but this can cause problems in the future. The builder’s lawyer is hired to act on the builder’s behalf. The lawyer will assist you with obtaining title of the land and a mortgage but they do not act for you. What happens if you have a legal dispute with the builder or are unsatisfied with their work? Also, if you use your own lawyer to obtain title and a mortgage, you will be in control of your money. You may have the right to stop the payment of mortgage funds to the builder if you believe that the builder has performed deficient work.
Save on Building Costs. It is easy to get carried away when you are building a home. Take care that glitz and gadgets do not take precedence over good construction. The builder is fully capable of doing anything you wish, but, this all will come with a price – so, be careful and wary of unique, extravagant, or far-out requests, new technology, and untested materials and equipment.
Communicate and Keep Records. It is important to have strong communication together with the builder you are utilizing. Keep records, receipts, record of phone calls, all correspondence, samples you approve, any changes or modifications to the plans, etc. Be redundant and leave nothing to chance. Follow up verbal discussions and instructions with written verification. The more time and effort spent up-front in establishing specifics of the project, the better the chance for a smoother construction period and a satisfactory result.
Check on Progress. Monitor your home as it is being built and touchbase with your builder on a regular basis. It’s a thin line between being involved in the process and being a pest, but make sure you don’t seem disinterested. It is crucial to keep an eye on things during construction to make sure they are being done according to specifications agreed upon.
Consider A Home Inspection. Consider the services of a qualified home inspector during the construction of your home. You may require that a clause be inserted into the Purchase Agreement with the builder that stipulates that construction inspections are permitted. If your builder will not accommodate construction inspections, consider having a home inspector accompany you to your pre-delivery inspection where you will create a list of deficiencies with your builder representative prior to occupancy and any money changing hands. If that is not possible, after you move into your new home, there is generally a period in which you may forward a list of deficiencies to the Warranty Program. There is another opportunity as you approach your first anniversary in the home but before the builder service warranty expires.
Be Flexible. Understand that construction is an imperfect science. This combined with natural elements (site conditions, weather) means that things could change. Do expect a substantially built house, free of defects and in accordance with all applicable building codes and regulations but be prepared as flat-out errors do happen. Absolute perfection may not be achieved but drastic imperfections should be corrected and it is within your rights to require this.
If you have any questions about the house building process, I would be more than happy to chat and offer some general guidance from my experience/knowledge. I am always here to help you in your quest of selling, finding and/or building your perfect home!
Ivana Locke is a Realtor with Schmidt Realty Group Inc. in Edmonton (www.WeSellEdmonton.com). You can reach her at (780) 504-5218 or
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