If you look through different condominium agreements from most building developers, you will notice that they appear similar, and generally include many clauses that favour the builder. This means builders can delay closing, cancel agreements under different conditions, and leave buyer without recourse in some cases. If you are purchasing a freehold home, you can still make sure that you have your lawyer fully involved in the process so that your agreement is reviewed thoroughly. This gives you the opportunity to know whether it is worth accepting or not.
Here are some important points to note when buying a home from a builder
1. Consider hiring a real estate agent
You don’t necessarily need to use a real estate agent when buying a new construction from a builder, but you will meet a sales agent during your visits to the model home. It is therefore in your best interest to have someone that has your back during the negotiation and discussion process. Having a real estate agent will help you look out for your best interest.
2. Have more than one lending option
Your regular bank or credit union will likely offer you attractive interest rates and mortgage conditions, depending on how good your banking history with them is. Your real estate agent will also know some lenders that may have better terms. Take your time to shop around for the best rate and terms combination that makes sense for you financially. Mortgages are a long-term commitment, so you must be sure to get multiple quotes. It is usually advisable to speak to up to five lenders to have a wide range of options to choose from. Shopping for quotes will save you as much as $3,000 on your payments.
3. Get legal advice
Having a real estate lawyer review your documents before signing an assignment for your new home is important. While standard purchase agreements can look casual, there are always clauses and language buried in the fine print that may not protect your interests as a buyer. A real estate lawyer will help you review your cancellation rights, contingencies, potential health risks of building materials, liabilities and commitments, timing conditions and warranties involved in the purchase agreement.
4. Verify your building options and upgrade prices
Builders make the most profit when they sell upgrades to you. If you’re going to opt for upgrades, make sure everything is clearly stated in a document. Confirm that you understand the cost of the upgrade per unit, as well as how all the upgrades will affect the final price of the house. Check if the builder will cancel an upgrade if you change your mind, and what the conditions are. Also be sure how certain upgrades will affect the delivery of your home. You can also have a conversation with your mortgage lender to see if they will finance your options or upgrades. If you need to pay out of pocket, consider how much you can afford to pay.
Contact Hecht Schondorf for legal help today.