June 21, 2023 • Buying
By Kate Barker
The Bow Valley is moving and shaking with new developments, and that means many condos and houses are available for pre-construction purchase. Buying a home this way has a slightly different process than buying a resale home already on the market, and there are some factors to consider.
Buying a new build can be exciting. No one has lived in it before, and if it’s still under construction, there may be opportunities for upgrades in the building process. New builds might also come with a warranty, which can offset early repair costs. They could also offer deposit protection. But new builds also come with different considerations. An established home that’s been lived in has “settled”, meaning all the quirks have been discovered and worked through. You’ll want to research the builders of your new home to check their quality and avoid committing to a headache in the making.
Maintenance should be lower with new builds, therefore condo fees should be lower as well. This can make it easier to save money and even make pre-purchase payments when moving into the unit. It takes about two years to work out exactly how much it costs to maintain a condo building, and therefore there could be fee increases or “cash calls” on the horizon. It’s best to budget extra for condo fees in a new build, so you can be flexible if things change in a year or two.
A pre-construction home comes with a schedule of when it should be completed. While some builds finish on time, some do not, and this can lead to delays that might affect your current living situation. These delays can last months, or even years. In rare cases, the project might be cancelled altogether, meaning it’s best to have a solid Plan B until your new home is ready. Research other developments in the area to get an idea of whether they tend to finish on time or not. This will give you an idea of what to expect.
The Right Professionals
Surrounding yourself with the right professionals will make the pre-construction purchase process that much easier. Talk to a real estate agent who knows the ins and outs of pre-construction purchases and find a lawyer that specializes in this type of sale. Have them read over your purchase agreement and make sure you understand what exactly you’re signing. Closely read the warranty so you understand the terms. Armed with the correct information, a pre-construction purchase can be a great way to get into your next home.