Is It Easier To Buy A New Construction Home?
At Justo, we love to listen to our clients’ real estate success stories. But we also hear lots of stories about home buying and building nightmares!
With market prices soaring to all-time highs in the GTA and home selling in hours for above asking, you might be thinking about whether it might just be easier to build a brand new home instead of an existing one.
As with everything in the world of real estate, there’s a lot to consider when you make this decision. Based on our experiences (and the hundreds of hilarious, frustrating, and unbelievable stories we’ve heard), we can’t give a definitive ‘yes’ or ‘no.’ But we can give some insight into what to look out for.
Make Everything Easier With Justo
Yes, we’re inserting an unashamedly brazen plug for ourselves right off the bat.
If you want your home purchase to be as easy as possible, hire us to handle all the details. We partner with some of the very best companies in the business to get you mortgage approval, home inspections, legal representation, and even staging if you have a property to sell. Plus, we offer you some serious cashback – 50% of our commission to be exact.
Contact us to learn more about new construction and about how our streamlined process will make your home purchase easier than you ever thought possible.
Know the difference between preconstruction and newly constructed homes.
Preconstruction = Homes or condos that aren’t built yet, but are available for purchase. You’lll be involved in the construction process by deciding which floor plan you prefer, what flooring and finishes you would like, and even what paint colour the house will be. This type of purchase can be a lot of fun, but also very stressful since you’ll need to make a lot of decisions.
Newly Constructed = A home that is move-in ready, and has never been lived in before. In this situation, you won’t be involved in making any decisions about the look and layout of the home.
This article focuses on the ease of buying newly constructed homes.
‘Easy’ and ‘Not So Easy’ Considerations When Buying a Newly Constructed Home
Not So Easy: You may have to do some DIY work or finish the property yourself.
A newly constructed home might not be 100% finished. Liveable and safe? Absolutely! But you might have to employ a little elbow grease to turn it into the home you’ve been dreaming about. Things that might not be done when you move in:
- Garage may only be framed and insulated
- Basement might be unfinished and may need walls, flooring, and even electrical
- Lawn and landscaping might be nonexistent
- Likely won’t have a back deck, even if you have patio doors
- May not have fences
For many people, this isn’t a negative thing. You get to have control over the look and function of these details and you can work on them (and pay for them) over time. You’ll likely want to set aside money to pay for some of these things right away.
Not So Easy: There’s not a lot of room for price negotiation.
Shopping for a newly constructed home is more like going to the mall than it is like bidding on a property. Your new home will probably have a price tag your builder isn’t going to negotiate. They’re usually priced very fairly. If you want a better deal on your home, watch for builders to offer incentives or specials. They will! And it will usually be when a new development is just beginning, or coming to a close.
Easy: There are no bidding wars!
So, you can’t really negotiate the cost. However, if you’re willing to pay the sticker price, the house is YOURS! No waiting to find out if your offer was accepted or losing out on your dream home AGAIN… You know what you’re getting and paying, and that’s a lot of peace of mind.
Easy: You may have a lower down payment option.
If the down payment is a blocker to buying a new home, newly constructed homes may have a cheaper down payment requirement. Sometimes, only 5% is required instead of 10-20%, the industry standard.
Easy: You won’t be worried about unforeseen issues with the home.
Newly constructed homes come with warranties! Warranties on appliances, windows, flooring, faucets, and even craftsmanship. So if your roof leaks your first spring or the dishwasher just doesn’t get things clean, you’ve got people to call who will come fix or replace what isn’t working.
Easy: Builders might offer incentives to help with closing costs.
When a builder is developing a new community or constructing an entire condo complex, they have bulk buying power and they pass the benefits on to you. If you use their lenders, they can often save you a lot of money on closing costs.
Easy: Drama-free move-in.
We’ve heard nightmare stories about people buying existing homes, sitting outside their new property in a moving truck, and they can’t get the keys to the house. Sometimes, that’s because there’s a hold-up at the bank, or maybe the old owners haven’t expediently vacated the property. Whatever the reason, it can be stressful, to say the least. When you purchase an existing home, as long as you have all your own ducks in a row, there won’t be any delays on move-in day.
At Justo, we believe there are some great reasons to consider new construction. We also know the hottest spots in the city to get great deals on new houses and would be happy to talk to you about your options. Whatever home purchase you have in mind, our realtors want to ease your stress and make home buying (and selling) as pleasant for you as possible. Give us a call at 1(647)794-0064 to learn more.