I’m a big believer in the power of new home developments and the value and ease of purchase that they bring to would be home owners. No matter what your motivation for purchase is, be it as a family home, an investment tool to drive wealth, or perhaps a bit of both, purchasing a home from a professional developer allows you to accomplish all those goals while making a measured and smart decision without significant pressure.
The best aspect of purchasing a new home is the value that you acquire then you put pen to paper. Purchasing a new home, with new plumbing, electrical and other finishes allows you not only a piece of mind when purchasing, but a piece of mind should you choose to sell the property in the coming years. The value of a new home is substantial when compared to a comparable home that has 20 to 25 years of wear and tear on it.
Secondly, depending on the amount of time until closing, you start building equity the day you sign. As an example, let’s say you purchase a new home with a $60,000 down payment and purchase price of $600,000 with a 6 month closing. Over that 6 months, house prices rise 5 percent. The day you move in, your home is now worth $630,000 and you have yet to pay a cent on your mortgage. You basically made $30,000 profit off of that initial $60,000 investment over that 6 month time period. There is no investment that I’m aware of that can get you that level of return that quickly.
No bidding wars
Anyone who has purchased a home over the past few months knows what a bidding war is. Smart listing agents will hold offers to a certain date while pricing their home 5 percent below market value, hoping to create what would be a significant amount of offers on offer night, and generally they do. While you want to add conditions to protect yourself, and you should, in bidding wars, you are almost under pressure to exclude them in order to sway the property your way.
With new home developers, you have no bidding wars, you have no sticker prices that are up for negotiation, you walk in generally understanding the price of the home and the price of the lot that you’re looking for. There will always be fees attached to any purchase, taxes, levies and perhaps lot premiums, you know all this (assuming you have a smart real estate sales representative working on your side) and are educated about this before you sign the agreement of purchase and sale.
Most developers actually require you to do due diligence with regards to financing and lawyer review of documents, they want you to know what your signing and want you to talk to your bank/ mortgage broker before finalizing the deal, they want you to close, the don’t get paid until you do, so pressing you into buying something you may not be able to afford is not something they want you to do, it does them no good.
When you’re purchasing a new home, you have the opportunity to customize certain aspects of your home to fit your needs. Be it a certain colour, a certain flooring type or a style of cabinetry, most developers have a fairly good amount of basic, non upgraded finishes and features to fit your personal lifestyle. Perhaps you like a specific colour of granite? Perhaps you perfect a specific colour of vinyl flooring? These are all customizable and depending on the developer, free of charge. Now don’t get me wrong, developers do charge for some upgrades, for example changing a tub to a stand up tile shower or adding a window or door to a specific room, they can do that for you for a fee. Now what type of upgrades get you the most bang for your buck and what upgrades bring the most value for resale? That’s something that an experienced real estate agent with a background in selling new homes can help you with (yes, that’s me).
Most new home developers are enrolled with the Tarion new home warranty. I’ll talk about it more in a longer post, however the Tarion new home warranty consists of three separate coverages for low rise homes. A 1 year warranty for deposit protections and delays in closing or occupancy, in addition to defects in workmanship, Ontario Building code violations, etc. The two year warranty covers items such as water penetration through the basement or building envelope or defects in the electrical or plumbing and heating systems, while the 7 year warranty covers major defects in the building’s structural components. Tarion also has a history of all enrolled builders within Ontario that you can check to see history of claims and issues with past developments.
So, the question is, why do you need representation when purchasing your new home?
For the same reason you need a lawyer to look over the paperwork and for the same reason you seek out qualified help for things like home and car repairs, having a qualified person work with you, giving you all the information you need to make a smart, educated decision with regards to your purchase. Having someone work with you explaining your warranty coverage, negotiating fees and looking after levies and occupancy dates for you. The builder, while
completely reputable, does write the agreements of purchase and sale in their best interests, it’s important to have someone like myself in your corner, working on your behalf. The best part of having your own advocate? It’s of no cost to yourself, the builder and developer pays a finders fee to any real estate sales representative bringing clients to a project. It’s a no brainer.
Interested in looking at some new home developments in Northumberland? Let me help you find your perfect new home in a perfect location.