New Home Construction
One of the first things you must understand about new home builders is that they are not going to “Give” their spec homes away. A lot of people that I have come across recently have thought that because the builder built the home a year or two ago and they are still trying to get of that you will be able to get that home for a song and a dance!
Builders build on Spec…meaning Speculation, not Specification – that there are going to be buyers out there who are going to purchase the home that has already been built under their design. They are in a sense, hedging the market, betting that if they “build it, the buyers will come”.
So, if you are going to buy a Spec home and it’s been on the market or the builder has had it for a while, by all means give it a good go to see if you get a good discount off the price. But do not expect that the builder is going to go BROKE if you don’t buy it!
Buying a New Home with your REALTOR®
There a lot of people that think REALTORS® cannot represent you in the purchase of a new home; this is simply not true. We can and we gladly will help you so that you know the right questions to ask, what you can expect during the process and act as a guide, as we regularly would, just as if you were purchasing a resale home.
So here is a list of how you would go about making that purchase of a new home with your REALTOR®:
- Communicate with your Agent that New Homes are in your price range and are of interest
- Pick the areas that you want to look at those new homes and schedule it with your Agent to go out and look
- If you are working with a REALTOR® you have to understand we are commission based; if we do not Register you with the show home in the area you are interested in, we do not get a check.
- If the home you are interested in is a Spec home, and it is NOT listed on the MLS®, the contract WILL be written on the Alberta New Home Warranty Program contracts (rules may differ by province).
- If the Spec home is listed on Realtor.ca, the initial offer will be written on the standard AREA contract and once accepted will be transferred over to the Alberta New Home Warranty contract (rules may differ by province).
- You CAN Negotiate on the Spec homes. In my experience some builders are willing to throw things in like window coverings or sod for your yard. You just have to know how and when to ask for these things.
- Do you NEED a home inspection? Well that one is up to you! I have seen it on new homes, in fact I had one done on my home (but we also built during the “Boom” in Calgary back in 2006!).
- Closing costs: Typically the builder will allow you to use their lawyer and will cover the cost of the fees; of course if the home is not listed on Realtor.ca this scenario is more likely.
- A walk-through is planned usually upon possession day to identify deficiencies within the home so that the builder can come back in and fix them. This varies but there will also be a 3, 9, and 12 month walk-through to do the same.
So there you go: a quick and dirty list of how you might go about working with an Agent to purchase a new home. If I may impress upon any and every one who reads this post, please concentrate on the FIRST point that I made. Communicate with your Agent – make sure he/she knows you are interested in new homes – we can and will represent YOUR interests in the purchase.