Real Estate Tips: Purchasing New Homes or Condominiums
- Always make sure the Agreement is conditional on lawyers’ approval.
- You should also make the Agreement conditional on the sale of your own home and mortgage financing.
- Do not go firm if you are relying on the sale proceeds of your home to buy the new property unless
(i) you have a firm sale offer or
(ii) you have written approval from your bank that you are able to carry both the mortgage on the home you are selling as well as the home you are purchasing. - Most Agreements have hidden closing costs. Get the Builder to “cap” these costs at the Agreement presentation stage or before you remove the condition of lawyers’ approval, as same can result in substantial savings to yourself as a Purchaser.
- Before you remove the condition on financing, have the Builder’s lender or your own financial institution (if they will do it) “cap” or guarantee your interest rate in writing on your mortgage either until the date of closing (preferred) or for 18 months from the date of the Agreement.
- Verify with the Builder whether the Plan of Subdivision or Condominium Plan has been registered and whether a building permit is available. If it hasn’t been registered, there is a greater risk that your closing date will be extended beyond the date set out in the Agreement.
- Ask the Builder what other subdivisions he has built. Go to that subdivision and ask the current homeowners how they felt about the Builder and the quality of workmanship of their new home or condominium.
- Check with Tarion (formerly the Ontario New Home Warranty Plan) as to your Builder’s rating and whether they have received any complaints about your Builder.
