Why Buying a New Construction Home Is Different Than a Regular Home Sale

Buying a brand new home can be one of the most thrilling things for a new homeowner—it's the ultimate clean slate just waiting to be filled with lasting memories. But buying a new home has a few caveats that really can't be ignored. Find out more about what's different with a new construction sale so there are fewer surprises.

The Timeline of Buying a New Construction Home

With a new home, buyers have to contend with the owner's schedules (which can be difficult enough). With newly constructed homes, buyers have to deal with delays from government authorities and nasty weather. Unfortunately, both climate patterns and local politics can be extremely unpredictable, so buyers should be ready for possible hiccups. However, it's important that buyers understand that not all excuses are created equal. For example, builders can typically work in snow and light to moderate rain. Cold weather may impact certain factors (e.g., when a driveway is poured), but it shouldn't delay the project as much as you might think.

Negotiating to Buy a New Construction Home

When builders drop their prices, they set a precedent for the rest of the properties they sell. Even one exception could lose them money for any new projects they take on, and the real estate agents they hire are well aware of this fact. It's why having your own real estate agent with experience in new construction homes can make it easier to find ways around this. If the property isn't in high demand, builders may do decide to cover closing costs or upgrade the property instead of dropping the price.

How Negotiations for a New Construction Home Purchase Differ from a Resale Home

Though market conditions matter most, in most locations, new home builder are typically less willing to negotiate with buyers than resale home sellers are. This means that homebuyers must be creative in finding negotiations that will receive a positive response.

In almost all markets, lowball bids will just not work. Instead, prospective buyers of new construction homes must look for ways to add value to their purchase. Asking to wrap all closing costs into the purchase price or an extension on the warranty can often achieve the best results. When buyers take the time to find and utilize the right negotiation tactics, they can get the best deal without missing out on winning the bid.  

The Logic Behind Buying a New Construction Home Over a Single-Family Home

When a homeowner sells a house, even with the help of a real estate agent, their emotional stake in the game can drastically affect their decision-making process. But a new builder has no connection to the house whatsoever, which means they make calls based on what's good for profits. Every day is a loss if a home doesn't sell, making it important they sell sooner rather than later. Look for homes that have been on sale for longer than a month if you want to get the best possible deals.

A Comparison of New Construction Homes vs. Resale Homes

There are certainly a lot of distinct advantages to buying either an older home or a newer one. At times it comes down to simply a matter of preference and the type of house you would most like. Here are some things to consider when you are making the choice between an older home and a shiny brand new one.

The Cost of Repairs for New Construction Homes vs. Resale Homes

This is usually the most important factor to take into consideration. Newer homes often don't need any major repairs or renovations in the near future while older homes usually will. Many of these repairs can cost a lot of money such as complicated plumbing, a new roof, electrical work or new siding. You will have to pay for these maintenance costs since it might be difficult or next to impossible to sell your house without getting the work done first.

Energy Efficiency in New Construction Homes vs. Resale Homes

When you buy a new Calgary home, the chances are good that it will be a lot more energy efficient. The doors and windows will consist of high-tech designs as well as the lighting. If the house comes equipped with appliances, you can also expect them to be energy efficient.

Many old homes have been renovated by their previous owners and they can be very efficient energy-wise as well. It is important to find out from the owners or the agent what types of renovations have been completed on the house that would make it more efficient.

Neighbourhood Comparisons for New Construction Homes vs. Resale Homes

When looking at houses in more established parts of town you'll notice the beautiful gardens and trees. This is a lot more stunning than the new sod that is being laid and the asphalt poured for the driveways in the new Calgary neighbourhoods. Be sure to take a look around at all of the landscaping in the community before making a final decision.

The Cost of New Construction Homes vs. Resale Homes

When two homes that are similar in value are being compared on a one–to–one basis, the older homes usually end up costing less than the newer Calgary homes. The price certainly plays a major role in the final choice and this may mean the end of the debate.

Contract Requirements for a New Construction Home

It's always important to get everything in writing, whether buying a previously-owned home or not. However, new construction can be particularly hazardous, especially if the home isn't finished by the time it's purchased. Get the home inspected to ensure the quality of the construction is everything the manufacturer promised before making an offer. If it's not, you'll have more leverage to get the property up to standards (or to abandon of the sale entirely) Whatever is agreed upon, make sure it's all written down before formalizing anything. Request that all contingency plans and consequences are spelled out before you sign.

Research to Be Conducted When Buying a New Construction Home

Sometimes construction projects are completed in new neighborhoods like West Springs that the buyer knows little about. The builder certainly isn't likely to broach what's coming down the pipeline in terms of change, and even the buyer's real estate agent may have no idea. So it's on the buyer to do their homework about the value of the property both now and in the future. The same is true of everything from the lender to the concessions made for the purchase agreement. For example, a builder may reasonably ask for deadline exceptions if they have trouble getting the necessary approvals from local ordinances, but some companies may use this as an indefinite excuse to delay the timeline.