Do you choose the resale market or opt for a pre-construction home? When you are in the market to buy a home, it is an important consideration. There is no doubt that pre-construction homes have a certain appeal to homebuyers. 

Buying brand new provides the opportunity to own a home that no one else has ever lived in. And because the house is in the pre-construction phase, you have the opportunity to customize it to your preferences. 

If pre-construction is something you’re considering, here’s the info to help you decide if it really is for you. 

What is a Pre-construction Home? 

A pre-construction home is exactly what it sounds like: a house you buy before it has been constructed. Most styles of homes are available for pre-construction buying, including: 

• High-rise condos 
• Low-rise condos 
• Detached houses 
• Semi-detached houses 
• Townhouses 

For a condo development, you’ll buy a home from blueprints or a 3D computer rendering that provides a simulated walk-through. For houses, you can usually visit a model home that sits on the lot of the future development. Although model homes tend to be highly aspirational in their decor, it’s your chance to get a more realistic look at what you’ll be buying. 

What to Consider When Buying a Pre-construction Home 

The Process of Buying a Pre-construction Home

If you’re wondering, how buying a pre-construction home works, imagine buying a property that hasn’t been built yet. It gives you some flexibility but also comes with risks. Whether you’re considering pre-construction detached homes or condos, you’ll pick your home based on blueprints or 3D renderings. Keep in mind that developers might make small changes to the layout as they build.  

Are pre-construction homes cheaper? These properties are often priced lower because developers offer discounts to attract early buyers and secure funding. However, you also need to account for potential costs like upgrades, closing fees, and any unexpected changes in construction timelines. Pre-construction homes often come with flexible payment plans, where buyers make incremental payments during the construction phase. After signing the purchase agreement, these payments are non-refundable. The timeline for new pre-construction homes can take months or even years, and delays are common due to things like weather, supply chain issues, or market changes. Locking in your price early can be great if home values go up, but if the market cools, you could end up paying more than it’s worth. Be aware of these risks and have a backup plan if delays drag on.  

Blueprints and Renderings

When buying pre-construction detached homes or condos, don’t just rely on blueprints and renderings. Developers often use wide-angle lenses and special lighting to make spaces seem bigger than they are. If you can, visit a model home to get a better feel for the real size and layout, but remember that models are often packed with upgrades that won’t be included in your standard unit. Pay attention to things like ceiling heights and window placement, which can make a big difference in how open the space feels. Also, with new pre-construction homes, ask about possible changes to finishes or materials—what you see in the renderings isn’t always guaranteed, especially with potential supply chain issues. Make sure you get these details in writing to avoid surprises later. 

Interim Occupancy for Condos

For condo buyers, interim occupancy happens when the building is ready for you to move in, but it hasn’t been officially registered, so you don’t fully own the unit yet. During this time, you’ll need to pay occupancy fees that cover things like maintenance and taxes, but they don’t count toward your mortgage. Many buyers don’t realize this phase can last longer than expected, depending on how quickly the developer finishes the registration. If you’re buying pre-construction homes, you may also face restrictions on renting out your unit or making changes during this period, so it’s important to check with the developer about what’s allowed. When figuring out how to find pre-construction homes, make sure to factor in these extra costs and any potential restrictions when planning your budget. 

Assignment Sales

With pre-construction homes, you can sell your contract before the property is built through what’s called an “assignment sale.” This is a good option if your circumstances change and you need to back out, as it lets you transfer the purchase agreement to another buyer. However, assignment sales often come with extra terms, like needing the developer’s approval, and they may charge additional fees or limit how much profit you can make on the sale. Some developers even restrict assignment sales altogether or only allow them after a certain stage of construction, so check these details in your contract. Also, assignment sales can be trickier to market since buyers may need to cover your original deposit, making it less appealing to some.  

Tarion Warranty Protection

In Canada, new pre-construction homes are covered by the Tarion Warranty, which protects you from issues like construction defects, structural problems, and delayed occupancy. The coverage is broken down into different time periods—one year for general defects, two years for things like plumbing and electrical systems, and seven years for major structural issues. What some buyers don’t realize is that it can also cover problems like water leaks or even landscaping defects, depending on what’s in your agreement with the builder. The warranty isn’t automatic. You need to file a claim within the covered time frames to get repairs. Also, check if your province has slightly different warranty protections, as it can vary.  

Price Adjustments and Escalation Clauses

Some contracts for pre-construction homes have escalation clauses, which let the builder raise the price if material or labor costs go up during construction. These increases can happen for reasons like inflation or supply issues, and there’s not always a limit on how much the price can rise, so the final cost could end up being more than you expected. Escalation clauses are more common when the economy is uncertain. In some cases, the increase might only apply to certain materials, while in others, it could be broader. You can try to negotiate the clause or ask for a limit on how much the price can go up. Be sure the builder explains how they’ll notify you of any changes, and have your lawyer check the details so you’re not caught off guard. 

The Benefits of Pre-construction Homes 

So, what’s the big attraction of a pre-construction home? There are quite a few benefits, including: 

Warranty

Like buying a new car, a brand-new home comes with a warranty. The warranty programs in Canada offer protection for newly built homes, including delays in occupancy and closing coverage, protection for your deposit, and the cost of repairs should there be issues once you move in. 

Lower Price Tag

Are pre-construction homes cheaper? Pre-construction homes can offer better value than the resale market because you’re essentially buying a promise. You put down your deposits (as per your purchase agreement), and the builder promises to deliver a home by a specified date. 

No Bidding Wars

Depending on where you’re shopping for your home, bidding wars can raise the price. When inventory is low, buyers are desperate, and the more attractive the home and neighbourhood, the more chance you could end up paying an inflated price for a resale home. When it comes to pre-construction, you’re looking at a set price. You’ll know exactly how much you’ll pay, usually at fair market value. 

Designer Home

You have the option of designing your home with plenty of upgrades available. There are not only upgrades for finishings like kitchen counters and flooring, but you can often make structural upgrades, including adjusting some floor plan options. 

Because you’re making all your decisions during the building process, they are far more affordable than a reno or upgrade once you move in. The pre-construction process allows you to make smart decisions that will increase the resale value of your home. 

Lower Condo Fees

When buying a brand new condo, the condo fees are lower in new builds than in resale condos. That is because everything is new, and the management has yet to see how much it costs to operate the building or property, so, as you will read below, this can also become a drawback. 

Flexible Deposits and Down Payments 

Although you tend to need more for a deposit or down payment for pre-construction, the payments are staggered. You have time to keep saving as there is a small amount paid upfront, and the rest is paid on a schedule that leads up to the final closing. 

Better Choices 

You’ll have more choices when buying pre-construction compared to resale condos, such as the floor and the location of your unit (i.e., a corner unit or a better view).  

10-Day Cooling Off Period

You’ll have ten days to “cool off” and reconsider your purchase. You can arrange for financing and have a lawyer review the agreement during this time. Should you change your mind or find something in the deal you don’t like, you can get your full deposit back and walk away. 

The Downside of Pre-construction Homes 

As with everything, you have to take the bad with the good. Some downsides to pre-construction include: 

Delays

You should always go into pre-construction with a hint of pessimism. The reality is that you could face delays. And we’re talking years, not weeks or months. Researching developers will help you find a trusted company with a good reputation for customer satisfaction, hopefully lessening the likelihood of delays. 

 Condo Fees Rising

Although you’ll see lower condo costs going in, you must prepare to see an increase of as much as 10 to 20 percent within two years. It takes about two years for the management to realize the cost of running the condo, and increases are always required. This has to be added to your monthly budget when determining if you can afford your new condo, or you might have trouble making ends meet. 

Higher Deposits

While you do get the opportunity to stagger your deposit payments, you will be paying as much as 10 to 20 percent overall, compared to a deposit of five percent when signing a resale agreement. In most cases, you’re looking at a five-per-cent sales deposit up front and then payments at four, nine and 18 months, depending on the developer or building schedule. 

Mortgage Challenges

When buying a resale home, you’ll usually be making your purchase before your locked-in rate expires. However, this can be a challenge for pre-construction homes if the home completion date is extended and passes your locked-in expiry date. 

Occupancy Fees

In the case of a pre-construction condo, there is a registration process required before you can legally own your unit. If you have to move in before registration is complete, that is called interim occupancy. You pay a monthly occupancy fee if you move in during this period, which does not go towards your mortgage. This monthly fee will include your condo fees, the interest portion of the balance owing on the purchase price, and a portion of your property taxes. 

Project Cancellation

When you buy pre-construction, you risk the project not making it to the finish line. Whether it’s a lack of sales or rising construction costs, pre-construction cancellation is a reality for many homebuyers. Sure, you get your money back. However, the money you invested in the project has not earned you anything. You could have used it toward another pre-construction development or an alternative investment. On top of that, you originally purchased at an earlier year’s price. That money now has to go toward today’s real estate market, which may have risen sharply, leaving you with less buying power. 

Other Pre-construction Costs

Your pre-construction home also has additional fees, including GST/HST. There are rebates available if the house is your primary residence, depending on your province. 

You’ll face some taxes (that you won’t be too thrilled about) if you intend to rent your unit. A good way to avoid these taxes is to live in your unit for a while before renting it out. 

There are also closing costs you don’t have when buying a resale home, such as charges for utility meter installations, fees to track your deposit payments, electronic land registration system usage, and more. 

These additional fees can add up to as much as three percent on top of your purchase price. Working with a real estate agent and lawyer will help you get a more realistic view of what further costs you’ll have to pay on your pre-construction home. A real estate agent can also help you look at a variety of resale and pre-construction options so that you are sure to find your dream home. 

How to Buy a Pre-construction Home?

You can take steps to maximize the benefits and minimize the risks of buying a pre-construction home. If you are wondering how to buy a pre-construction home, first research your builder. Visit online directories to determine if you are purchasing from a reputable builder. You’ll want to know that they have a record of completing projects so that you can be confident that you are investing your money wisely.  

Next comes the purchase agreement. You must understand the agreement before you sign it. It is a legal and binding contract, so you must have your lawyer review it before you sign on the dotted line. This review is your chance to understand the warranty coverage on the home better. You are buying a new home, so some parts of your home are covered after you purchase it, making it essential that you understand what is covered and for how long. 

Speaking of lawyers, some legal professionals specialize in pre-construction homes and are a real asset in the buying and negotiation phase. They know what to be on the lookout for and can guide you. On top of being a significant financial investment, it also requires a more extended buying period, so it’s best to have someone experienced by your side. 

Finally, you will need to prepare for your pre-delivery inspection. Before you take possession, you can walk through your new home and ensure that the house is delivered to you as was agreed. You can reference pre-delivery checklists to ensure you are looking for the right things. 

Completions Are Slowing 

Over the last year, a new trend has formed in the Canadian real estate market: Residential construction activity is taking too long to build. Whether because of a tight labour market or rocketing interest rates, single-family homes and condominiums are being completed at a snail’s pace. Today, it takes approximately five to ten years before a residential development is ready to move into – it is usually around 18 months before a single-family home is completed – and the current trends are becoming riskier for developers. 

While housing starts are higher than they were before the coronavirus pandemic, it is taking so long to deliver new projects to the market due to the plethora of simultaneous projects underway. As a result, the lengthy delays could exacerbate Canada’s affordability challenges because the country will be unable to construct the roughly 5.8 million homes it needs in seven years. 

The delay in construction has also affected homebuyers in myriad ways. 

Industry experts argue that homebuyers are not closing their transactions and walking away from enormous deposits. The reason? Interest rates have soared to their highest levels since before the Global Financial Crisis, meaning buyers cannot qualify for a mortgage when the closing date nears. This is especially troublesome if prices continue their growth from the coronavirus pandemic. 

Reports suggest that some deposits are as high as $320,000. 

Before buyers think they can abandon their purchase without any repercussions, legal experts say that builders can seize the deposit and sue for any damages. Additionally, if the developers resell these properties for less than what the original buyers acquired them for, builders can return to the party and request a difference in the cost. 

“While some new launches with competitive price points have seen success, many projects have been unable to make an economic case for proceeding in the current market, causing more supply to be put on hold,” said Shaun Hildebrand, president of Urbanation, in a report. “As pre-sale activity typically impacts construction starts with a 12-18 month lag, the slowdown in new condo sales that began in the second half of 2022 is expected to continue weighing on construction starts in the coming quarters.” 

Ultimately, the Canadian real estate market, notably in the major urban centres, is beginning to witness two trends: a pile of empty homes and developers abandoning projects. 

New to Pre-construction Homes? Get The Help You Need 

Knowledge is key to moving through the pre-construction process, especially if it is your first time. An experienced real estate agent can help you right from the start. From analyzing market data to understanding the purchase price, a real estate professional understands your local market and can guide you throughout the process. 

Having a real estate agent guide you when buying pre-construction homes can make the process much smoother. They help with contracts, negotiating terms, and understanding details like escalation clauses and interim occupancy. Agents also know how to find pre-construction homes that suit your needs and budget. If you’re wondering “How does buying pre-construction homework?” a RE/MAX Michael Cowling and Associates agent can walk you through every step so you’re well-informed and protected throughout the process. 

If you're navigating this dynamic market, whether buying or selling, let's talk strategy. Our team can guide you through the most efficient processes, aiming to save you time, money, and hassle. Contact us today and let's make your real estate journey a success!

Source: RE/MAX.ca

When it’s time to sell your home or transition to a larger space, making your current small house feel more spacious can leave a lasting impression on potential buyers. The way your house looks—both inside and out—can significantly influence its appeal. By creating the illusion of a larger, more open space, you can make your home feel inviting and give it a competitive edge in the market.

Fortunately, there are a variety of easy, effective strategies you can use to enhance the sense of space in your home. From smart paint choices to clever furniture arrangements, you can maximize both the interior and exterior to make your small house feel much bigger. Here are some tried-and-true tips to help your house look and feel more expansive.

1. Use the Power of Paint

Paint can transform the perception of space, making rooms appear larger and more open. When used strategically, both interior and exterior colors can create an airy, expansive feel.

Exterior Colors: Choose light shades like beige, soft gray, or white for the main exterior color. These colors reflect more light and make the house feel bigger and more welcoming. Darker colors for trim, windows, and doors can add dimension and highlight architectural details without overwhelming the overall look.

Interior Colors: For the interior, stick with light tones such as pastels, soft grays, or off-white to create the illusion of larger rooms. These shades reflect both natural and artificial light, making spaces feel brighter and more open. Consistency in color across rooms also helps create a seamless flow, preventing visual interruptions and making the space feel more expansive.

To add depth, consider using darker colors in specific areas—like one accent wall in a room. This can make the space appear larger by drawing the eye outward and elongating the dimensions of the room.

2. Make the Most of Architectural Details

Incorporating certain design elements can enhance the sense of space and bring more natural light into your home. Here are a few architectural tricks to help maximize the feeling of openness:

• Horizontal Siding: On the exterior, horizontal siding can make the house appear wider, giving it a more spacious feel.
• Large Windows: Adding larger windows allows more natural light to flood the space, making rooms feel brighter and bigger. Large panes offer unobstructed views, blurring the boundary between indoor and outdoor areas.
• Sliding Glass Doors: Sliding glass doors that open to patios, decks, or gardens help extend the living space, especially when they allow the indoors to merge seamlessly with the outdoors.
• French Doors: These elegant doors not only improve the flow between spaces but also add visual appeal. When opened, they create a wide entryway that enhances the feeling of openness.

3. Free Up Floor Space

Maximizing floor space is key to creating a sense of openness. Here are some ways to make each room feel more organized and less cramped:

• Multi-Functional Furniture: Choose furniture that serves more than one purpose. For example, ottomans with hidden storage, convertible sofas, or dining tables with built-in shelves can reduce the need for extra furniture, keeping spaces uncluttered. Just be sure the furniture is appropriately sized for the room to avoid overwhelming it.
• Built-In Storage: Invest in built-in storage solutions like recessed shelves, wall-mounted cabinets, and under-bed drawers. These keep items out of sight, allowing the floor space to feel more open.
• Vertical Storage: Take advantage of vertical space with tall shelves and hanging storage units. These solutions draw the eye upward, making the room feel taller and more expansive.

4. Create Clear Pathways and Functional Layouts

An effective layout can significantly impact how spacious a room feels. Be mindful of furniture arrangement to ensure an open flow:

• Unobstructed Pathways: Avoid placing large furniture pieces in high-traffic areas. Arrange seating and tables to create clear paths for easy movement between rooms.
• Room Flow: Ensure that the layout of each room encourages an intuitive flow. Rooms that transition easily from one to the next will feel larger and less cramped.

By optimizing the layout and reducing visual clutter, you’ll create an environment that feels both functional and spacious.

Final Thoughts

Whether you’re preparing to sell your home or simply want to make your current space feel more comfortable, these strategies can help your small house appear larger and more inviting. The key is to maximize light, minimize clutter, and use color and design elements that create an illusion of space.

If you’re looking to sell your home or move into a larger one, working with a real estate expert can ensure a smooth and successful process. Contact your local RE/MAX agent today to start your journey toward a successful home sale and an exciting new chapter.

If you're navigating this dynamic market, whether buying or selling, let's talk strategy. Our team can guide you through the most efficient processes, aiming to save you time, money, and hassle. Contact us today and let's make your real estate journey a success!

Source: RE/MAX.ca

Moving into a new home is an exciting journey. To ensure a smooth transition and a comfortable start, consider the following essential steps:

1. Change the Locks
   For your security, it's wise to replace all exterior locks. This ensures you're the only one with keys to your new home. You can install new deadbolts yourself or hire a locksmith for assistance.

2. Inspect for Plumbing Leaks
   Even if a home inspection was completed, double-check for any leaks. Look for dripping faucets, and running toilets, and inspect your water heater for signs of leakage. A simple test is to check your water meter before and after a period of no water use; a change indicates a possible leak.

3. Deep Clean Carpets and Floors
   Before moving in your furniture, consider steam cleaning carpets and thoroughly cleaning hard floors. This ensures a fresh start and can eliminate any lingering odors or allergens.

4. Clean and Sanitize Cabinets
   Wipe down all kitchen and bathroom cabinets inside and out with a non-toxic cleaner. This is especially important if the house has been vacant, as pests may have settled in.

5. Familiarize Yourself with Key Home Systems
   Locate your circuit breaker box and main water shutoff valve. Knowing how to quickly turn off water or electricity in emergencies can prevent potential damage.

6. Test Smoke and Carbon Monoxide Detectors
   Ensure all detectors are functioning properly and replace batteries as needed. If any devices are outdated or missing, install new ones promptly.

7. Replace Air Filters
   Change the HVAC system's air filters to improve air quality and system efficiency. Regular maintenance can also extend the lifespan of your heating and cooling systems.

8. Set Up Utilities and Services
   Ensure all essential services—such as electricity, water, gas, internet, and waste collection—are set up and functioning before your move-in date.

9. Introduce Yourself to Neighbors
   Building a rapport with your neighbors can foster a sense of community and provide a support system in your new environment.

By taking these steps, you'll create a safe, comfortable, and welcoming environment in your new home.

If you're navigating this dynamic market, whether buying or selling, let's talk strategy. Our team can guide you through the most efficient processes, aiming to save you time, money, and hassle. Contact us today and let's make your real estate journey a success!

Source: Michael Cowling

Fall Maintenance Checklist: Protect Your Home This Season

As the leaves change color and the crisp air sets in, it’s time to prep your home

for the colder months ahead. Regular home maintenance not only preserves the beauty

of your property but also saves you from costly repairs down the road. Below, we’ve

compiled a comprehensive fall maintenance checklist to help you keep your home in tip-

top shape for the coming winter.

1. Inspect the Roof

Start at the top—your roof is your home’s first line of defense against the elements.

Loose or damaged shingles: Take a close look at your roof for any missing, cracked, or

curling shingles. These can lead to leaks and bigger problems if not addressed.

Clear gutters and downspouts: Gutters clogged with leaves and debris can cause water

damage and ice dams. Make sure they’re free-flowing to direct water away from your

foundation.

2. Seal Windows and Doors

Nobody likes a drafty home, and those little air leaks can drive your energy bills through

the roof.

Apply caulk or weatherstripping: Make sure windows and doors are properly sealed to

keep the heat in and the cold out. This will also improve energy efficiency, which can

save you money in the long run.

Ensure proper insulation: Adding insulation around windows and doors can reduce heat

loss and keep your home comfortable throughout the winter.

3. Check the Heating System

Your heating system works overtime in the colder months, so give it the attention it

needs before it’s too late.

Furnace or heat pump service: Have a professional check your furnace or heat pump to

ensure it’s working efficiently.

Replace filters: A clean filter not only improves air quality but also allows your heating

system to operate more efficiently.

4. Clean the Chimney

If you plan to cozy up by the fire, make sure your chimney is in safe working order.

Schedule a chimney sweep: A professional can remove dangerous creosote buildup

that could lead to chimney fires.

Check for obstructions: Animals love to nest in chimneys during the offseason. A quick

inspection can prevent blockages and smoke from entering your home.

5. Test Smoke and Carbon Monoxide Detectors

Your home’s safety is non-negotiable.

Replace batteries: Make sure all detectors have fresh batteries.

Test alarms: Press the test button to ensure they’re working properly and keep your

family safe in case of an emergency.

6. Inspect Exterior Paint and Siding

A little TLC on the outside goes a long way in protecting your home from the harsh

winter elements.

Touch up peeling paint or damaged siding: Exposed areas can lead to water damage,

so seal them up to avoid costly repairs later.

7. Winterize Outdoor Faucets and Irrigation Systems

Frozen pipes are the last thing you want to deal with during a cold snap.

Turn off water supply to outdoor faucets: Drain and disconnect hoses to prevent water

from freezing and bursting the pipes.

Drain irrigation systems: Make sure all outdoor pipes are empty to avoid cracks or leaks

come spring.

8. Inspect and Clean Decks and Patios

Your outdoor spaces need attention too!

Remove debris and clean surfaces: Leaves and moisture can cause wood rot or make

surfaces slippery. Give everything a good clean to prevent damage.

Check for repairs: Look for loose boards, cracks, or other signs that your deck or patio

may need a little maintenance before winter.

9. Trim Trees and Shrubs

Winter storms can wreak havoc on overgrown trees and bushes.

Prune branches: Trim back any branches that could fall on your home or power lines in

a storm. Healthy trees will better withstand winter weather, and your property will be

safer.

10. Check Attic Insulation and Ventilation

The attic is often the unsung hero of your home’s energy efficiency.

Ensure proper insulation: A well-insulated attic will prevent heat from escaping, reducing

your energy bills and keeping your home warm.

Ventilation: Make sure your attic is properly ventilated to prevent ice dams and keep the

temperature regulated.

Taking the time to complete these tasks now will help you avoid bigger issues down the

road and ensure your home is ready for the season. After all, a well-maintained home is

not just about preserving your investment—it’s about enjoying peace of mind as you

head into the winter months.

If you’re unsure about tackling any of these tasks on your own, don’t hesitate to call a

professional for help. Happy fall, and here’s to a warm, safe, and stress-free winter!

If you're navigating this dynamic market, whether buying or selling, let’s talk strategy. Our team can guide you through the most efficient processes, aiming to save you time, money, and hassle. Contact us today and let's make your real estate journey a success!