There are certainly advantages to buying a pre-construction home, not the least of which is that you get a brand-new home that (hopefully) requires no repairs or updating and is covered by warranty. Many pre-construction homes can also be customized so that you end up with exactly the finishings you want.
If you are considering this path to home ownership, here are 5 things to know when buying a pre-construction house in Alberta:
1. Be sure you know what you are buying
Pre-construction homes are often bought after viewing plans or a model home, but these models often include upgrades that are not included in the base price of the home. If you are not paying for the upgraded finishes, you should look at samples of the finishes that will be included in your home before you sign an agreement.
Landscaping is often not included in the price of a pre-construction home and can be a significant additional expense. Also, keep in mind that buying in a new subdivision may mean that construction will be ongoing in your neighbourhood for years after you move in.
2. Be prepared to wait
The fact that a pre-construction home has not been built yet means that you will not be moving in anytime soon. In fact, it might be two or three years before you can move into your new home. While this might be acceptable for some, it does mean that pre-construction is not for everyone. Your circumstances might change significantly in three years, so take that into account before you sign a purchase agreement. Ask whether the agreement can be assigned to someone else if your life has moved in a different direction when the time comes to close on the deal.
3. Do your research
Builders in Alberta need to be licensed by the government in order to build new homes. You can search the registry to make sure that the builder you are dealing with is properly licensed. The registry was set up to protect Albertans from untrustworthy builders, so take advantage!
4. Consult a lawyer before you sign a purchase agreement
When you sign that agreement, it is legally binding on both you and the builder. You can be sure that the builder had their lawyers draft the agreement and that it is generally favourable to them. Before you sign, have your own real estate lawyer take a look to ensure that you know exactly what you are agreeing to.
Your lawyer will make sure you are aware of:
- any additional fees that you are responsible for on top of the purchase price
- your liability to pay GST (it is charged on new homes in Alberta, but you are entitled to a rebate if the home will be your principle residence)
- what you need to do to make a claim under your new home warranty and when you need to do it.
5. Know your rights under your new home warranty
All builders of new homes in Alberta must provide new home warranty coverage. The government has mandated minimum coverage, but some builders offer additional coverage. Make sure that you understand the coverage attached to your new home and arrange for periodic inspections well in advance of any coverage expiry dates so that you can make any necessary claims.
Our Edmonton real estate lawyers are here to help with all of your pre-construction purchase needs. For legal advice and representation on your purchase , contact us today! Our Edmonton real estate lawyers will be pleased to speak with you.
