I’m looking to buy a newly built home. Should I still work with a real estate agent?
With new homes popping up and construction cranes towering in many communities across the province, buying a brand new home or condo has never been so accessible or appealing for home buyers.
As you visit presentation centres, you may find scale models and glossy brochures showing the planned development, a variety of floor plans, examples of fixtures and finishes, and friendly sales representatives who are eager to help.
But, it’s important to remember that the salesperson working at the presentation centre is representing the builder. While the Real Estate and Business Brokers Act, 2002 (REBBA 2002) mandates that registered real estate professionals treat all parties in a transaction with fairness, honesty, and integrity, those folks will be working with the builder’s best interests in mind. Additionally, if the representative is a full-time salaried employee of the builder, they may not be registered with RECO.
Much like a professionally-staged resale home, it’s easy to get caught up in the beautiful features being showcased at a presentation centre or model home. Before you start selecting floor plans and paint colours, consider working with a registered real estate professional to represent you during the buying process. Having a knowledgeable professional protecting your interests is a smart move.
When selecting a representative to work with, interview several candidates and ask about their experience with new construction projects. Their expertise and knowledge of the new construction market can be beneficial in helping you find and select an appropriate property, negotiate with the builder’s representative, navigate the paperwork, recommend the use of other necessary professionals and ensure that your best interests are being represented in the transaction. Be aware that a builder may have their own policies about dealing with buyers’ representatives. Be sure to ask your prospective real estate professional about their fee arrangement before engaging their services.
It’s also a good idea to consult with a lawyer who has experience with new construction transactions. Ideally, have them review your Agreement of Purchase and Sale before signing the agreement. If buying a new condominium from a builder, you also have a 10-day cooling off period. Take advantage of that time to review your rights and obligations to make sure they fit with your lifestyle.
You’ll also want to refer to RECO’s counterpart that protects purchasers of new builds, the Tarion Warranty Corporation. By visiting their website, you can check the Ontario Builder Directory to ensure the builder is registered in Ontario, how many homes they have built, the communities where those homes are located, and whether Tarion has paid out any warranty claims associated with that builder. Like any insurance program, take the time to understand the obligations and limitations of the program.
Buying a new construction property has some unique differences compared to buying a resale property, not the least of which is that your closing date may need to move based on construction schedules. Regardless, my advice for home buyers is the same: be well-informed throughout the process, ask questions, do your due diligence, read all forms and contracts prior to signing and have the right professionals by your side. These are critically important steps in ensuring a positive buying experience.Joseph Richer is Registrar of the Real Estate Council of Ontario (RECO). He is in charge of the administration and enforcement of all rules that govern real estate professionals in Ontario. You can find more tips at reco.on.ca, follow on Twitter @RECOhelps or on YouTube at http://www.youtube.com/RECOhelps.