Is buying a pre-construction home in your future? 6 proactive ways to get ready

If you’re hoping to buy a new home but have put your plans on pause for now, you’re not alone. New research from Tarion finds that compared to a year ago, approximately 25 per cent fewer Ontario consumers plan to buy a home in the next 12 months, and 34 percent fewer consumers are planning to buy a new or pre-construction home in the next 12 months.

Waiting longer to meet a big goal can feel frustrating, but there’s a bright side to having extra time. The new home journey can be complex, and taking more time for upfront research can help you go into the process better informed and prepared. This includes knowing how the builder’s after-sale warranty can protect you as a consumer.

In Ontario, most new homes come with a warranty that’s provided by the builder and supported by Tarion, a non-profit consumer protection organization established by the Ontario government. The warranty is designed to help you feel peace of mind that you’re getting the well-built home you were promised, but you play an important role in getting the coverage you’re entitled to. And if challenges arise, Tarion can help.

While you wait for the right time to buy, here are 6 tips to help you get ready.

1. Check your builder’s track record
Look for a builder with a good reputation for high-quality homes and customer service. It’s a good idea to read online reviews and visit showrooms or model suites, but most importantly, check the Ontario Builder Directory online to make sure they’re licensed to build and sell homes in this province.

2. Line up a real estate or condo lawyer
A purchase agreement and its related documents contain important details about the terms and conditions of the sale and outlines in detail everything that’s included in the price of your home. Before you sign the agreement, get a lawyer to review it with you so that you fully understand what you’re buying.

3. Understand how much of your deposit is protected
If the sale isn’t completed and the builder doesn’t return your deposit, you can claim compensation from Tarion up to specific limits. This covers you in the rare case that the builder goes into bankruptcy or fundamentally breaches your agreement, or if you exercise a right to terminate your purchase agreement. Protection limits are based on the type and price of home you’re buying, and they’re listed on Tarion’s website.

4. Be prepared for delays
Your purchase agreement specifies a date when the home will be ready, and an extended date in case of delays. These details are listed in an attached document called the Addendum. If delays go longer than what’s stated in the Addendum, you could claim up to $7500 in compensation from the builder to cover extra expenses like moving costs or accommodations.

5. Know what to look for during your Pre-Delivery Inspection (PDI)
The first inspection of your new home is an exciting milestone. It’s also a critical opportunity to identify issues or defects in the home and work with your builder to address them. Tarion provides a helpful checklist and other free tools online to help you make the most of your PDI.

6. Learn more about your new home’s warranty coverage
After your new home is ready for you to move in, the builder’s warranty provides coverage against defects for up to seven years. You have the most coverage available in the first year, so plan to be proactive in identifying potential issues. This will give you more time to work with your builder to get them resolved.

Get ready for the responsibilities of owning a new home
A home is one of life’s biggest purchases, and it comes with a learning curve. That includes learning to care for your home, work with your builder to resolve potential issues, and manage a warranty claim if needed. Most of the time, homeowners and builders are able to resolve issues between them, but Tarion can offer guidance on the warranty claim process and step in to help resolve a claim, if needed.

As you wait for market conditions to change, embrace your learning curve so you can move forward when the time is right. Find more tips and information about the builder’s warranty at Tarion.com.