# 4 - 3101, Strandherd Dr Ottawa, ON K2G 4R9 Phone: (613) 825 7653 Mobile: (613) 220 6006 Fax: (613) 825 8762 Email JACK

Why You Should Use Our Added Service When Purchasing New Construction

As a Realtor we represent your interests as well as being your advocate and advisor throughout the home buying process of New Construction, our Knowledge and Value Added Service will be a tremendous asset to you.

 Note: It is Law in the Province of Ontario that all Newly Constructed Residential Dwellings, whether Freehold Residential or Condominium Residential, being sold to parties other than the builder, must be registered with the Tarion New Home Warranty. The exception to this law is if the Buyer & Builder both agree in writing to waive the Tarion Warranty or the Builder is occupying the dwelling as his principal residence.

Evaluation of the Builder:

  • a Cost Evaluation of Price Per Sq. ft for all builders that may offer a similar product that suits your Buyer’s needs
  • a side by side analysis of the different extras and features being offered by the different builders and are included in the Purchase Price. I.e.: includes hardwood floors in family room, extra bank of drawers in bathrooms, pedestal sink vs. sink & cabinetry, eaves troughing, upgraded trim & doors throughout, upgraded cabinetry, number of phone jacks, cable hookups and internet hookups, double garage vs. single garage etc.
  • a market evaluation of the property comparing with resale-homes
  • a report on all Builders’ Track Records i.e.: complaints filed, unresolved disputes etc.



  • recommend Buyer hire Stage Building Inspector
  • recommend Buyer hire Building Inspector to inspect property after Buyer has occupied dwelling for 8 months to assist with deficiencies report to be delivered to Builder & Tarion
  • Review Builders Agreement of Purchase and Sale, prior to signing, to ensure there are no hidden additional costs or unknown site influences and easements that may affect the property.


Advise You on the Following:

What the Buyer Needs to Be Know When Purchasing New Construction

The Downside to Purchasing “New Construction”

Deposits Required

  • Large Deposits are required
  • Freehold Residential Purchase: Deposits up to $40,000 are protected under the Tarion New Home Warranty Program
  • Condominium Purchases: Deposits up to $20,000 are protected under the Tarion New Home Warranty Program

        (If the New Home Builder is requesting a deposit in excess of the aforementioned, please advise     your client that if the Builder becomes insolvent that they may lose any deposit that is in excess of                amounts insured by Tarion)

Additional Costs & Upgrades

  • Costs for Additional Upgrades and Extras are in addition to the builders original list price i.e.: central air conditioning, built-in dishwasher, eaves troughing, window treatments, auto matic garage door openers, utility sheds, fencing, decks, finished basements, upgraded flooring which may included ceramic tile, hardwood and upgraded carpeting    List Price and in today’s Market Place the majority of Builders require any upgrade or extra to be paid in advance when ordering the extra or upgrade. Payment required may be for the full amount or partial payment only.
  • Costs for Lot Premiums could include:
    • End Unit for a Town home or Row Housing,
    • Lot Size i.e.: 30’ vs. 35’ lots or Pie Shaped or Lots with more than average Depth or Lots with more than Average Sq. Footage;
    • Lot’s backing onto Parks, Ravines, Open Areas, Golf Courses, Man made Ponds & Lakes, Water Front etc.
  • Buyer may have to pay for Builder’s Survey any where from $200-1200
  • Buyer will have to pay in addition to Listed Purchase Price, the costs for the Tarion New Home Warranty


Site Influences

Research needs to be done to ensure the property that the Buyer wishes to purchase does not face or back onto or will be located near any future site influences that could effect the resale value of the home i.e.:

  • Backing or fronting onto a future major roadway, railway, transit system etc.
  • Backing or fronting onto future institutionally zoned lands
  • Backing or fronting onto future commercially zoned property yet to be developed
  • Is home fronting onto a street that is a proposed future Bus Route
  • Is future home located in the vicinity of a waste disposal site (present or future) or airport (present or future)
  • Does home conform with future residential development i.e.: mix of single family homes with town homes or town walk-ups, apartments etc.


Possession Date Not a Guarantee

Under the Tarion New Home Warranty Program the builder may delay closing for reasons out of the builder’s control. Tarion has built into the warranty that the builder can extend closing up to 120 days by delivering notice in writing to the buyer prior to closing stating that they will require an extension. Note the Buyer has no right to terminate the Agreement as a result of the extension and must abide by the extension if notice has been delivered properly.

If the Builder requires a further extension after the initial 120 days the Buyer has the privilege of cancelling the contract.

  • Delays in closing in excess of 15 days but less than 120 days requires written notice to the Buyer 65 days prior to the original closing date stated in the Agreement of Purchase & Sale
  • Minor delays in excess of 5 days and not exceeding 15 days, requires written notice to the Buyer 35 days prior to the original closing date stated in the Agreement of Purchase and Sale.
  • Delays not exceeding 5 days require no notice.

Note compensation cannot be claimed by the Buyer unless the Builder has not delivered proper written notice or extension for closing or closing is in excess of 120 days


  • Home may only be 80% Complete
  • Landscaping may take several months to complete and Buyer cannot make use of the potentially muddy grounds
  • Quiet enjoyment is diminished as the builders trades personal will still need access to the home to complete unfinished work or rectify deficiencies noted in the pre delivery inspection.
  • Neighborhood will be dusty, dirty & noisy from unfinished construction


Long Occupancies

  • Early Possession is not an option unless the builder has inventory and still may require 60 days before Buyer can take possession.
  • Normally the Builder will need any where from 6 months to one and one half years depending on development plan & lot releases.


Mortgage Financing and Interest Rates

Mortgage Interest Rates cannot be guaranteed past 120 days, depending on lender and need to be applied for again prior to expiry of the guaranteed period and the Buyer may have to pay a high interest rate or may benefit from lower rates if they drop.

Benefits of Purchasing New Construction

Design & Finishing Control

The Buyer has the exciting opportunity of changing floors plans to suit their family needs and can choose finishing in flooring & cabinetry etc. that will suit their tastes.

Note the buyer will have limited control over the above, some builders do not allow for any floor plan changes unless a custom builder and the buyer must select finishings from builders samples. Some may be deemed as upgrades and additional costs will be associated with the upgrade or floor plan changes.


Building Equity on the Builders Dime

Due to the requirement for significantly longer closing dates, the Buyer will probably realize a healthy increase in their property value prior to closing. (Exception: if the real estate market changes into a Buyers Market the Buyer may not realize a dramatic, if any, appreciation prior to closing.)

Land Transfer Tax Rebate

Applies to First Time Home Buyers only to a maximum of $4,000.

Depreciation of Structure Due to Age

  • Does not factor into New Construction


Cost of Future Repairs

  • Will be less than that of re-sale


Time to Save Additional Monies

  • Due to longer closing dates the buyer will have extra time to save for additional monies for down payment, upgrades or new home furnishings. This is especially beneficial to First Time Home Buyers