How to Buy a New-Build or Pre-Construction House
9 mins read

How to Buy a New-Build or Pre-Construction House

The thought of purchasing an entire new house is attractive to a lot of house-hunters. As the first owner, you have the ability to personalize numerous aspects. Also, you don’t have to fret about bidding wars that can be a result of purchasing a resale item.
Although buying through a building company may be advantageous, some problems could be encountered in the course of buying. Here’s what you should learn about buying an unbuilt home.

What is a new-build home or pre-construction house?

A brand-new home, sometimes called pre-construction, is offered when builders release homes or lots that are available for purchase. Developers usually have a master plan in place for communities, but there are occasions when they might only have a handful of new homes available for to be sold.
A majority of builders will construct an actual home for you so you have a glimpse of how your home will appear. You will also find detailed renderings and floor plans available to show you the potential of your space. Because this is a brand new construction, you’ll generally be able to select certain items, like the color of your cabinets as well as your kitchen countertops. It’s possible modify the design. The way you can customize the layout is contingent on the design that the builder has to offer.
The new construction houses are generally purchased by the construction company directly however, you may be able to buy the contract for a brand new construction from the buyer who originally purchased it before they move into. This is referred to by the term assignment sale. Based on the date you purchase your contract could still be able customize the house.

How do you locate a builder or a community

Locating a new-build house in Auckland is simple as a variety of websites showcase every community that is developing. Although you can see these developments online, contacting an agent to represent you is still a smart option. They typically have insider knowledge or early access to new communities.
Discuss your budget, desires and requirements together with the realtor. When they know what you’re searching for, they’ll provide suggestions on the options available. The next step is to visit several showrooms to find what you find appealing. Be aware that the neighborhood and community are as important as your home it self. The most important thing you’d would like is to have a gorgeous home in an area that you don’t like.
While looking into communities and developments You should also examine the reputation of the builder. Ask your agent whether they’ve heard of anything negative regarding the building company. In particular Have their previous projects received a positive reception or did they have problems with the quality? If you do a quick Google search is likely to provide a wealth of information about the contractor. While a reputable builder may cost more, it could be worthwhile if it spares you a lot of headache later.

What is the process of implementing the payment schedule

One of the biggest distinctions between homes built by new builders when compared to resales is their timeframe for payment. Pre-construction homes generally require a 20% deposit of the purchase cost.
The deposit is required prior to you can get a mortgage, which is why it’s an appropriate amount to save. Every builder has different time frames for payments However, a standard one could look like this:
A whopping $5,000 when you sign the contract
5.5% (minus $5,000) within 30 days from the date of
5 percent after 60 days from the date of
5% within 120 days from the date of
5.5% of occupancy
Certain builders offer a longer pay-plan, giving the buyer more time bring your money together. Some even have fixed quantities rather than percentages.
If you are buying a house it is recommended that your deposit be protected with Tarion Warranty Corp. This is to protect you in the event the builder goes under or if there’s a breach of the purchase contract or you’re granted the right to end the contract. If you’re purchasing a pre-construction condominium, the deposit is protected under The Condominium Act.
Although this type of insurance can give your peace of mind could also be detrimental to you. Let’s say, for instance, you bought a pre-construction home but the project is terminated within three years after delays. The deposit you made at the beginning would be returned, however, should there be any positive changes in the market for real estate then you may not be able afford an identical new house at the present price.

Additional fees to take into consideration

When buying a home the advertised price is typically for the basic model. If you’re looking for something more the cost will increase. Although it is feasible to bargain the price of your purchase however, builders are likely to offer customers “free” upgrades instead of an affordable price.

While you may be able to modify your home but the builder is likely to restrict your choices. Additionally, acquiring things that aren’t included can cost you more as builders earn a profit from upgrade. Although getting the upgrades directly from the builder may be easier but it may be more cost-effective to upgrade following your move-in.

It’s worth asking if they can alter the layout of your home or add additional features like more electrical sockets or pot lighting. Even if it’s not listed in their list of prices there’s a chance it’s offered at a price.

If you purchase a new home constructed from scratch it is necessary to pay the land transfer taxes (if appropriate) as well as sales tax. Additionally, you’ll need to hire an attorney to assist you in closing the deal. They’ll assist with things like doing a search for title, and ensuring that the property is registered under your name.

You may be able to pay the tax by using the GST/HST New Homes Rebate, or by exploring the tax credit for new buyers in Auckland.

Pros and cons of purchasing a brand new home

It’s not difficult to see why buying an entire new house is attractive however, you must take a look at the following points before deciding if a new home is the right choice for you.

The pros and cons of buying a new house
You’re the owner of the house for the first time. Many people like the idea of being the sole owner of their home.
It is able to be customised. If you purchase pre-construction, you have a say in the finishings and possibly the design.
The initial maintenance is minimal. Since everything is brand new and brand new, you won’t have to replace anything in some time.
Possibility of appreciation. Your home could be worth more at the time you buy it.
There are no bidding wars. There aren’t any blind bids in buying the construction of a new.

Pros and cons of buying a new house
A large down payment is needed. You’ll probably require 20 percent of the purchase price to satisfy the terms of the purchase agreement.
Potential delays. There are usually delays for new homes, which can impact your move-in date. There is also the possibility that the home will never be constructed.
It’s hard to know the exact features you’ll get. Even if there is homes that are model homes available but you will not know exactly what you’ll receive until the home is completed.
Upgrades can cost a lot. The upgrades available could be a substantial price increase.
The character of the house is limited. New homes built in subdivisions are similar to the ones you see and are often lacking in charm. They can also be away from the amenities.
If you’ve learned the steps to purchase a brand new home, you’re able to decide whether it’s the best choice for you. It could be a bit lengthy however, nothing beats the feeling of entering your brand new home to the first time since the closing.

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