(NC) New homeownership is a significant milestone in your life — it’s an investment in your future and the place where you’ll spend a significant amount of time. But a purchase this large requires due diligence. Here are some tips that every new home buyer should know as a start:
1. Read your agreement over carefully. You’ve chosen the home that’s right for you. Hopefully you’ve also researched your builder on the Ontario Builder Directory to make sure they’re licensed to build and sell homes in the province. The next step is signing the Agreement of Purchase and Sale. Pay attention to what you’re signing and be sure to read all of the dates outlined to get a sense of how long it may take for your new home to be ready for occupancy. It’s always best to go over this contract with an experienced real estate lawyer. Make sure that anything you discussed with your builder is included in this document. A verbal agreement is never considered a binding contract in real estate.
2. Limit your down payment. Under Ontario’s new home warranty, buyers are protected up to $40,000 for deposits on freehold homes and $20,000 for condominiums (in addition to the protections in the Condominium Act). Take caution before making a deposit that exceeds these limits — in the rare occurrence that you do not receive your new home, you’re only covered up to these amounts.
3. Get ready to move in — but be prepared for some unfinished business. Sometimes, new homes are ready for occupancy but don’t feel complete to the new home owner. This is even more evident when buying a new condo. Many buyers find out the hard way that they’re required to take possession of their completed unit before common element features are finished, such as the front reception, landscaping, and swimming pool. This means you could be living for many months in a construction zone, without the anticipated amenities.
4. Understand your warranty protection. Almost every new home built in Ontario comes with warranty coverage that is provided by the builder and backed by Tarion. In addition to deposit coverage and delayed closing compensation, there are also three separate warranties on new homes. Together they last up to seven years and include violations to the Ontario building code, coverage for major structural defects, and defects in workmanship and electrical, plumbing, and heating systems. Your builder should provide you with a homeowner information package before you take possession with detailed information about the warranty.
Find a more resources, tips, and information online at tarion.com.