How to Buy a Pre-construction Home
While the majority of home purchases are resales, there’s a certain attraction to owning a completely new blank slate. If that’s what you’re interested in, the best thing to do might be to buy a pre-construction home.
Unlike a resale, where you simply buy something from an owner, a new home purchase means you’ll be dealing directly with the builder. Every company has its own unique process to make the homebuying experience smooth and enjoyable, but this is a general guide for how to go about buying a new home.
Find your home
The first step is of course to find a place you want to live. You can go hunting for sales centres yourself, but here’s the thing: by the time sales are open to the public, most of the good stuff is already gone.
New developments sell units in phases and before the public phase, there is usually a VIP phase, followed by an agent phase. This early access is why finding a good realtor is just as valuable when buying a new home as it is buying resale. A good real estate agent can help you get an insider deal when you buy a pre-construction home.
Whether you use a realtor or not, always do your research on builders to avoid companies that do sloppy work or that usually take longer than they promise.
When you find a development in a location that works for you, it’s time to start negotiations with the builder’s salesperson. It’s during this time that you will hammer out all the details of what you’re actually buying. Remember they’re building this for you. You can choose from all sorts of upgrades and layouts to suit your needs.
When you’ve settled on pricing and features, you sign a purchase agreement and the journey really begins.
The construction process
Before starting construction, the builder will go over all the plans and walk you through the process with the blueprint. This will be your opportunity to meet the site manager, who will oversee the construction of your home. When you buy a pre-construction home, getting to know the people overseeing the process is important, since they will be your main line of communication.
As construction begins, you will most likely be given regular updates on how construction is going. Patience is key as building a home can take years and run into unforeseeable complications.
Just before the builder finishes the home you’ll have the opportunity to check out the entire home and make sure everything is in order. You may be buying a brand new home, but it’s still worth it to play it safe and get an independent home inspection.
Paying for it
Not all lenders will approve mortgages on pre-sales. It’s recommended to shop around for the mortgage that will work best for you as you buy a pre-construction home. And of course, once you take ownership of your new home, get yourself some home insurance and rest easy in the place you’ve been dreaming about for so long.