Buying a new home from the Builder....

[SandStorM]

Hey Guys,
I have a few questions regarding this just if anyone else has ever bought a home from the builder.

1. Do i need to get a Real Estate guy for the process or shall i sign the agreement on my own?

2. If i get the Realtor, is it worth it ?? (paying for him and having him negotiate everything?)

3. How much can you negotiate with the builder when buying a new home?

4. Are there any troubles that we may face when buying from the builder?

5. Anything to be careful about ?

Thanks alot . Appreciated

---------------------------

Are these builders alright?

Branthaven
Mattamy
Fernbrook
Monarch
Crystal

 

[kona]

I've purchased several homes in the last couple of years from builders and my RE agent was useless. Sat there and collected the commission. Why did I do it? Well it's no skin off my back, so why not. My agent remembers the favor, so when it comes time to sell or to find renters, I get really good deals from her. There is very little wiggle room, the price is the price (maybe this has changed because of the economy). You may be able to squeeze a couple of upgrades. Now, what to look out for...take the contract to your lawyer for a review. There should be a few adjustments that need to be capped.

 

[shuda]

Do Your Research

We've bought from the same builder twice:

Been happy both times and neither time
did we have a real estate agent.

But this was in Southwestern Ontario,
not in Toronto.

The closing will be done by your lawyer,
so you don't have to be a legal beagle.

In terms of negotiating with the builder,
it depends on the builder.

Some won't customize plans.
Others charge a fee to customize.
Ours would customize at no charge

If you take out windows or whatever,
they will credit you with the saving.

I found them very flexible in what they would do,
but the prices were pretty much set in stone.

Obviously, if you bump out a foundation,
or add a room or a bathroom it is going to cost.
But there was no cost for revising model plans
to our needs.

New homes in Ontario are covered by Tarion warranties.

You may want to check their web site
for general advice on building a new home
or for any info speficic to your builder
http://www.tarion.com/home/

Your lawyer would also be able to give you
a heads up on the reputation of your builder.

Not sue what other research options
might be available in TO.
Better business bureau?

A good builder will invite you to talk to others
who are alreadly living in their homes.
Do it.

If you are careful enough
to do reasearch b4 hiring an SP,
make darn sure you do your research
b4 you buy a house!

 

[thompo69]

Hey Guys,
I have a few questions regarding this just if anyone else has ever bought a home from the builder.

1. Do i need to get a Real Estate guy for the process or shall i sign the agreement on my own?

2. If i get the Realtor, is it worth it ?? (paying for him and having him negotiate everything?)

3. How much can you negotiate with the builder when buying a new home?

4. Are there any troubles that we may face when buying from the builder?

5. Anything to be careful about ?

Thanks alot . Appreciated

Well, a realtor wouldn't cost you anything, since their commissions are almost always paid by the seller, but they won't really do much for you in this scenario. More importantly, you will need a lawyer to review the agreement of purchase and sale. A lot of lawyers will do that for no cost hoping to keep your business for the closing.

As for negotiating it depends on the builder how much they are willing to move, but many developments used a fixed pricing structure. Do a lot of research into the builder, as they are not all created equal.

As has been mentioned, new homes are warrantied by Tarion, but keep in mind that if this not your first home purchase, they are subject to GST. Since first-time home buyers are eligible for a refund of the GST, most prices you see advertised for new properties will not include the GST, so you may find the cost goes up significantly if you're not eligible for the rebate.

 

[squash500]

IMHO, it is a very good idea to hire a good real estate lawyer before you do anything else. A lot of these agreements that the Builders use are very tricky for the average person or even RE agent to understand. Never sign anything without your lawyer looking it over first.

 

[SandStorM]

thank you all budz

IMHO, it is a very good idea to hire a good real estate lawyer before you do anything else. A lot of these agreements that the Builders use are very tricky for the average person or even RE agent to understand. Never sign anything without your lawyer looking it over first.

Thank you all.
I will take your advice into consideration.. Now the question is, which builder out there is good?
I will name a few in the original post.

Branthaven
Mattamy
Fernbrook
Monarch
Crystal


I have decided that I may not need a Real Estate Agent by my side for purchasing the home from the builder. However, once I decide on what I like, the Agreement to Purchase of Sale, Do i get a copy and can I take it to my lawyer before I sign anything with the Builder ? Will they give me that ?

Thanks once again

 

[kk56]

your new home will be subject to the HARMONIZED TAX, Gst and PST, right?
Ready?

 

[squash500]

Thank you all.
I will take your advice into consideration.. Now the question is, which builder out there is good?
I will name a few in the original post.

Branthaven
Mattamy
Fernbrook
Monarch
Crystal


I have decided that I may not need a Real Estate Agent by my side for purchasing the home from the builder. However, once I decide on what I like, the Agreement to Purchase of Sale, Do i get a copy and can I take it to my lawyer before I sign anything with the Builder ? Will they give me that ?

Thanks once again

Sandstorm I used to work for a RE lawyer in an administrative capacity many years ago based in Toronto. Disclosure----I am not a lawyer myself.

What this RE lawyer told me is that a lot of these Builders agreements have clauses in them that shouldn't even be there in the first place. The Builders hire top lawyers to draft these agreements and it is essential that a potential buyer of one of these homes has their own lawyer look over the agreement before anything is signed.

You should insist that the builder give you a draft copy of the agreement of purchase of sale so that your lawyer can look it over. Tell the builder that this is the legal advice that your lawyer told you to do.

One reason that Builders agreements of purchase and sale are quite different then buying a resale home etc is that these BA's often have clauses that can extend the closings of the homes indefinitely due to construction delays etc.

Good luck with everything Sandstorm!

 

[oldjones]

A couple of guys have already said, get a lawyer. I repeat: get a lawyer. This is likely the biggest purchase you've ever made (maybe will ever make) and a house is a very complicated machine with lots to go wrong, and most of it hidden behind plaster and paint and yours isn't even built yet. Never mind, you're about to sign a mult-page, complex contract that commits you for decades, and you aren't even sure you get a copy.

GET a LAWYER, get her before you agree to, or sign anything. Someone you will trust to answer questions like that, and who can warn you about land transfer tax, sales tax, closing costs and such. And since a real estate agent is free, get a good one and pump her for every bit of info you can. Visit a development your builder already finished and inspect the resale homes, talk to owners if you can. You're about to go swimming with sharks and you want all the help you can get.

 

[Cycleguy007]

1. Do i need to get a Real Estate guy for the process or shall i sign the agreement on my own?

2. If i get the Realtor, is it worth it ?? (paying for him and having him negotiate everything?)

3. How much can you negotiate with the builder when buying a new home?

4. Are there any troubles that we may face when buying from the builder?

5. Anything to be careful about ?

1. Do not get a real estate agent. You have a better chance of negotiating the deal yourself, and since the "buying" agent still wants his commission, this will come into play...)

2. See answer for question #1. But you WILL need a real estate layer.

3. Pretty much EVERYTHING in life is negotiable (except SP rates ;-) ). When I purchased our current home, there was a list price, then we added about $20,000 in "upgrades" (e.g. moved walls, revised location of services, upgraded sub flooring, plumbing rough ins in the basement, upgraded finished flooring, upgraded windows, upgraded kitchen cupboards etc.) Note- upgrade stuff that cannot be easily purchased or changed after market. e.g. The builder wanted $2500 for central air upgrade, which I declined and had arranged on my own for $1500 the day after we moved in. Anyway- we went back and forth for about a week and we ended up getting all $20,000 in upgrades for $8,000 over list cost.

4. Biggest problem we experienced was getting the builder to finish ON TIME. At about 90 days before our mutually agreed upon closing date, I reconfirmed that the house would be done on time since I had sold our previous home and we needed everything done on a specific date. They confirmed this in writing so I "closed" the sale of our current home on the same date. Then 2 weeks later I get a letter from the builders lawyer saying they were revising my closing date by 60 days! That's when my letter writing campaign started! I went up one side and down the other and finally convinced them it would be in their best interest to finish the home on time. (I later found out that they did this to about 8 other people and since I was the person who screamed the loudest, they delayed all the others in order to finish mine- I even threatened to go to the press- wrote directly to the VP of the builders!) There were other little issues of things that weren't completed on time, but this is pretty much always the case anyway. The only other issue I found later was when I was finishing my basement- I discovered that the drains for the shower and toilet that I paid extra for were 18" away from the location I asked for. They tried to say- "oh they are just roughed in... too bad- so sad." My answer to that was simple- I SPECIFICALLY TOLD them where to put the drains, and it WAS IN MY CONTRACT so they were in breach. (This is also another reason why you need a lawyer- any correspondence made should be copied to your lawyer...) In the end, they did come and move them at their expense.

5. Don't take no for an answer. Don't let them push you around. Get EVERYTHING IN WRITING. If possible, visit the site of your new home OFTEN, get to know the site super... it may come in REAL handy in order to circumvent issues that may arise. PM me if you want more info on this. (In doing so, I managed to negotiate a number of things to my advantage!)

In the end, aside from the problems listed above we ended up with exactly the home we wanted. In talking with my neighbors, I found they tried many of these same "tricks" to delay or cut corners on them.

 

[Never Compromised]

Get a lawyer. Also, have a house inspector go over the home before you close. I was a sales agent for a contractor that did work for a number of builders, and every week one of my clients would tell me some horror story.

Stuff like the hot water line being hooked into the toilet, the gutters not being installed correctly and the rainwater leaking into the home. Improperly done footings causing a shit and the walls to crack. Wrong colour paint in the bedrooms, wrong knobs in the kitchen.

If the builder tells you he will fix the problem after close, he is lying. Once you have closed the problem is yours. Some builders might get to it in the next 6 months or so, and most will get to it if you spend a shit load of cash on a lawyer but only after they have waited as long as they possibly can.

The new home warranty is useless for many problems. I think that it must be a structural problem for them to be involved. Little things like the wrong batch of bricks being used to cover a repair is not covered.

One thing that you want to do is change the lock the moment you take possession. Builders have a master key for the subdivision and although they try to keep track of who has which key, some always go mission on every project. The other "gotta do it now" thing you want to do is to have the ducts cleaned professionally and I would even recommend steam cleaning the ducts. On construction sites, the duct get used for all kinds of nasty things.

On a building site, there is a lot going on. Many new people coming and going, movers, contractors etc. Get a monitored alarm system. One family I know closed on a Friday and were going to move in on the Sunday. They moved a few things in on their own on Saturday. When they arrived Sunday, the place had been cleaned out. All the new appliances, the toilets, some of their personal stuff went out the door. The neighbours watched and thought nothing of it because they assumed that the new people just were upgrading. When the builder was contacted, the response was "you closed, house is yours, not our problem".

 

[johnyboy]

All realtors are not equal like all professions. To think you know more than a very good one is stupid arrogance. There is many things he or she could do to maximize you transaction value. Although you may get lot's of free realtor advice it does not mean it will be good. Lawyers are legal specialist not home specialist. I could pick apart a couple of dozen things about a builder you may not know and same goes on the positive side. Location, must have upgrades, negotiating, resale issues, is it the right time to buy, referals for inspections lawyers, financing. But yeah everyones a realtor....

 

[johnyboy]

Get a lawyer. Also, have a house inspector go over the home before you close.

good luck with that.... most (all) builders will not allow that unless you negotiate it before hand. A good inspector will tell you to wait until the builder's warranty is up ( the one when you hand your list of defects over).

 

[enduser1]

Hire a lawyer. You will need one anyway and the lawyer can go through the builders deal first.
EU

 

[5hummer]

Ask who will be doing construction.

For example, avoid Cresford, as the quality sucks.

 

[Rockslinger]

Hey 2 Wheel Guy, is the "basement dungeon" one of the upgrades? Every TERBIE should consider getting a basement dungeon, just in case.

 

[Cycleguy007]

Hey 2 Wheel Guy, is the "basement dungeon" one of the upgrades? Every TERBIE should consider getting a basement dungeon, just in case.

Well rock, if that's what your into... go for it! (There may even be a few terb ladies lurking around that would like to torture you in it!)

 

[buckwheat1]

if teh home isn't built yet as to see teh building permit. I saw a show 2 weeks ago on tv where homes being built in hamilton had no building permits until they were finished then no inspection was done before the house was finished.

 

[thompo69]

your new home will be subject to the HARMONIZED TAX, Gst and PST, right?
Ready?

Harmonized tax does not come into effect until July 1, 2010, and only applies no purchases over $400k. No word on if they'll match the GST rebate given to first time buyers by the feds.

 

[Rockslinger]

The March 28, 2009 Saturday Star article said to set aside 15% to pay a multitude of taxes when purchasing a $450,000 house in the City of Toronto.