New Build Home Buyers - Don't Dispense With Representation

Not too many weeks back, hundreds of new-build hopefuls experienced a purchaser's worst nightmare when their developer, Urbancorp, came clean about its insolvency and ran for cover in bankruptcy protection. Those affected were in Toronto, but it's a tale of woe that could happen anywhere and serves as a stark reminder about the need for due diligence when choosing a new-build over the resale route.

Our post this week looks at just one caution (among many) that may help lessen some of the more avoidable risks and perils of laying down the cash on a new home or condo project that has yet to break ground.

Key Members To Include In Your Pre-Signing Support Group

The two professionals who can help you look beyond a pre-built's slick project plans and glossy brochures are a realtor and a lawyer. Unlike shoppers for resale homes, many new-home buyers pass on the realtor. But, an agent with a good knowledge of the new-home market in the area can provide you with valuable insight into the background, reputation and build quality of the development company - key information that could make the difference between investing in a quality dream home by a quality builder and a high-risk lemon.

Once you've narrowed down your selection, a lawyer can comb through the purchase agreement - which, for new-builds can be littered with red flags and clauses not designed with your best interests in mind. One example is unspecified municipal development fees that condo builders pass onto buyers. The contract may mention them, but a lawyer can ensure that there's also a clause in place to cap the maximum so you don't face hefty financial surprises before closing.

A lawyer can also advise you on how much of the deposit you can expect to see returned if the builder goes belly up, or about restrictions and penalties worked into the contract to prevent you from reassigning or renting a condo unit for a certain time after the building is incorporated.

The list of other possible cautions doesn't make for light reading. Suffice to say: new-builds can be tremendously exciting, but make sure you don't leave your consumer protection instincts at the threshold of the sales center.

Looking into buying real estate - new of resale?

Call us up.

Let us ensure that your interests are protected.

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