[et_pb_section fb_built=”1″ _builder_version=”4.18.0″ _module_preset=”default” custom_padding=”55px||||false|false” da_disable_devices=”off|off|off” global_colors_info=”{}” custom_margin__hover_enabled=”off|desktop” da_is_popup=”off” da_exit_intent=”off” da_has_close=”on” da_alt_close=”off” da_dark_close=”off” da_not_modal=”on” da_is_singular=”off” da_with_loader=”off” da_has_shadow=”on”][et_pb_row _builder_version=”4.18.0″ _module_preset=”default” width=”95%” max_width=”100%” custom_margin=”||-24px||false|false” custom_padding=”55px||||false|false” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}”][wahi_breadcrumb _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}”][wahi_breadcrumb-link title=”Real Estate 101″ _builder_version=”4.18.0″ _dynamic_attributes=”link_option_url” _module_preset=”default” link_option_url=”@ET-DC@eyJkeW5hbWljIjp0cnVlLCJjb250ZW50IjoicG9zdF9saW5rX3VybF9wYWdlIiwic2V0dGluZ3MiOnsicG9zdF9pZCI6IjcyMiJ9fQ==@” global_colors_info=”{}”][\/wahi_breadcrumb-link][wahi_breadcrumb-link title=”Buy” _builder_version=”4.18.0″ _dynamic_attributes=”link_option_url” _module_preset=”default” link_option_url=”@ET-DC@eyJkeW5hbWljIjp0cnVlLCJjb250ZW50IjoicG9zdF9saW5rX3VybF9wYWdlIiwic2V0dGluZ3MiOnsicG9zdF9pZCI6IjE2MzIifX0=@” global_colors_info=”{}”][\/wahi_breadcrumb-link][wahi_breadcrumb-link title=”@ET-DC@eyJkeW5hbWljIjp0cnVlLCJjb250ZW50IjoicG9zdF90aXRsZSIsInNldHRpbmdzIjp7ImJlZm9yZSI6IiIsImFmdGVyIjoiIn19@” _builder_version=”4.18.0″ _dynamic_attributes=”title” _module_preset=”default” module_text_color=”#686E6E” global_colors_info=”{}”][\/wahi_breadcrumb-link][\/wahi_breadcrumb][\/et_pb_column][\/et_pb_row][et_pb_row _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}”][et_pb_text _builder_version=”4.18.0″ _dynamic_attributes=”content” _module_preset=”default” header_font_size=”3.5rem” header_line_height=”4.5rem” header_font_size_tablet=”42px” header_font_size_phone=”3rem” header_font_size_last_edited=”on|phone” header_line_height_tablet=”4.5rem” header_line_height_phone=”3.2rem” header_line_height_last_edited=”on|desktop” global_colors_info=”{}”]@ET-DC@eyJkeW5hbWljIjp0cnVlLCJjb250ZW50IjoicG9zdF90aXRsZSIsInNldHRpbmdzIjp7ImJlZm9yZSI6IjxoMT4iLCJhZnRlciI6IjwvaDE+In19@[\/et_pb_text][\/et_pb_column][\/et_pb_row][et_pb_row _builder_version=”4.18.0″ _module_preset=”default” custom_padding=”3px||4px|||” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}”][wahi_socialsharing _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}”][\/wahi_socialsharing][\/et_pb_column][\/et_pb_row][et_pb_row _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}”][et_pb_text _builder_version=”4.18.0″ _module_preset=”default” text_font_size=”24px” text_line_height=”1.5em” custom_margin=”||11px|||” global_colors_info=”{}”]<\/p>\n
[\/et_pb_text][et_pb_text _builder_version=”4.27.4″ _module_preset=”default” text_font_size=”1.13rem” text_line_height=”1.18rem” custom_margin=”||10px|||” global_colors_info=”{}”]<\/p>\n By Emily Southey<\/a> | 13 minute read<\/p>\n [\/et_pb_text][et_pb_post_title title=”off” author=”off” date_format=”M j” categories=”off” comments=”off” featured_image=”off” _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}”][\/et_pb_post_title][et_pb_image src=”@ET-DC@eyJkeW5hbWljIjp0cnVlLCJjb250ZW50IjoicG9zdF9mZWF0dXJlZF9pbWFnZSIsInNldHRpbmdzIjp7fX0=@” align=”center” force_fullwidth=”on” _builder_version=”4.18.0″ _dynamic_attributes=”src” _module_preset=”default” custom_padding=”40px|||||” border_radii=”on|32px|32px|32px|32px” global_colors_info=”{}”][\/et_pb_image][\/et_pb_column][\/et_pb_row][et_pb_row _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}”][et_pb_text _builder_version=”4.18.0″ _module_preset=”default” text_font_size=”21px” text_line_height=”1.6em” header_2_font=”||||||||” header_2_font_size=”36px” header_2_line_height=”1.3em” header_3_font_size=”1.25rem” header_3_line_height=”1.88rem” header_4_font=”|700|||||||” header_4_font_size=”1.25rem” header_4_line_height=”1.88rem” global_colors_info=”{}”]<\/p>\n Does the idea of buying a new-build home in Canada appeal to you? We get it. Buying a pre-construction home or condo in Ontario comes with many benefits. You\u2019ll be the first person to live in that home, there will be minimal maintenance since everything is brand new, and you can avoid a bidding war (which is becoming all too common in the Ontario real estate market<\/a>). Plus, since you\u2019re purchasing the property before it\u2019s built, you can customize it to your liking. But there are also a few challenges that buying a new-build home represents. Below, we dive into the\u00a0homebuying process\u00a0<\/a><\/span>for a pre-construction property in Canada, including the pros and cons of new builds and our expert tips for buying a new-build home.<\/p>\n –<\/span><\/p>\n Nearly one in three homes in Canada are purchased pre-construction. But what exactly is a pre-construction home, you might be wondering? A pre-construction home, sometimes referred to as a new-build home, is bought directly from the builder before it is constructed (hence the name \u201cpre-construction\u201d). Developers typically create master plans for communities and then try to sell the homes they intend to construct. While most pre-construction homes are purchased directly from the builder, it\u2019s also possible to purchase a new-build home from an original buyer who never moved into the property. Purchasing a pre-construction home this way is called an assignment sale.<\/p>\n \u00a0–<\/span><\/p>\n Builders will often set up model homes so prospective buyers can get a better idea of what the finished product will look like. Detailed floor plans and lifelike renderings will also be provided to buyers. One of the biggest advantages of purchasing a pre-construction home or condo in Ontario is that you can customize certain details of the space. For example, you may be able to choose the colour of your kitchen cabinets or the material used on your island and countertops. You may even be able to make changes to the layout. The customizations available vary depending on the builder.\u00a0<\/p>\n –<\/span><\/p>\n Buying and paying for a pre-construction home differs from a traditional home. First, the minimum deposit for a pre-construction property is usually 20% of the purchase price. This can be a hefty sum, prohibiting some Canadians from going this route. Further, the 20% deposit is required before you get a mortgage. Therefore, you will need to have saved a healthy amount of money before buying a pre-construction home. The 20% deposit will be paid on an instalment schedule set by the builder. For example, you might have to pay 5% within 30 days of signing the agreement, another 5% 60 days after signing, another 5% after 90 days, and a final 5% after 120 days. Some payment schedules may have you paying a portion of the deposit the same day you sign the purchase agreement and\/or on occupancy. The overall length of the payment schedule varies. Generally speaking, the longer the payment schedule, the more time the buyer has to save the money. Overall, the unique payment schedule that comes with buying a pre-construction home can be daunting. Especially when you consider that the 20% deposit is typically paid in part or full without the help of a mortgage and before moving into the new home, which means you might still be making mortgage or rent payments on your existing property during this time. Make sure that you have the budget for a pre-construction home before signing the purchase agreement.\u00a0<\/p>\n –<\/span><\/p>\n Keep in mind that when purchasing any new home, there are usually additional fees to budget for. Pre-construction homes are no exception. First, when purchasing a new-build home, the advertised price is usually for the base model. Therefore, if you want anything extra added to the home, it\u2019s going to cost more. In some cases, you might be able to negotiate for certain upgrades to be included in the purchase price, but the builder will rarely agree to lower the price of the home. (It\u2019s worth noting that builders might charge more for certain upgrades than if you hired a different contractor to make the upgrades after you move into the home.)<\/p>\n \u00a0–<\/span><\/p>\n Two other fees to account for are the land property tax and sales tax. These\u00a0taxes\u00a0<\/span><\/a>are added to every home sale in Ontario. Land transfer taxes are paid to the Ontario government, and certain municipalities, like Toronto<\/a>, have an additional municipal land transfer tax. Meanwhile, sales tax is charged on most goods being sold in Canada, and that extends to real estate. In Ontario, homebuyers must pay the applicable 13% in harmonized sales tax (HST).\u00a0<\/p>\n –<\/span><\/p>\n Lastly, you will need to hire a real estate lawyer to help you close the sale. Your lawyer will review all the legal documents, including the purchase agreement. Legal expenses typically also include conducting a title search and registering the home in your name. As you might suspect, the cost of hiring a lawyer is far from cheap.<\/p>\n [\/et_pb_text][et_pb_code _builder_version=”4.27.4″ _module_preset=”default” hover_enabled=”0″ sticky_enabled=”0″]What is a Pre-Construction Home?<\/h2>\n
Payment schedule<\/strong><\/h3>\n
Additional fees to consider<\/b><\/h3>\n