Nail the details when having a new house built

If you are having a new house built in Canada, it is vital that you have clear communication and an understanding of exactly what you expect to get and what the builder will actually deliver.

This was underlined recently when Canada’s largest warranty provider, the Ontario New Home Warranty, surveyed new home buyers on the 'top ten warranty complaints.'

While items like finishing, drywall flaws and plumbing problems made the list, the overwhelming number one reason for warranty callbacks and complaints was 'consumer expectations.'

In other words, new home buyers felt they did not get what they were promised.

Ontario New Home Warranty, notes that "generally consumers are not aware of what is involved in building, buying and owning a new home."

Warranty officials have called on builders to train front-line sales staff better and keep lines of communication open with buyers to avoid such callbacks. But the real responsibility ultimately rests with the consumer.

Setting aside the emotional excitement, you must approach a new home purchase as a hard-nosed business transaction that involves a number of professionals and a challenging series of decisions.

Keeping a record of the correspondence—and even conversations—with the builder from beginning to end will help to ensure that everything moves along smoothly.

As a new home buyer, you should have a copy of every document that is part of the transaction. These documents may include all or some of the following:

The contract with your homebuilder: Always get a written contract setting out the agreement between you and your homebuilder. The contract should cover exactly what you are getting, in detail. For instance, if you are buying from a show house model, understand what items and features will also be included in your new home. The contract should also precisely detail price and payment milestones. Have your lawyer review the contract before you sign it.

New home warranty: Only Ontario, Quebec and British Columbia have a mandatory new home warranty program, with warranty coverage optional in other provinces. Make sure you understand exactly what the new home warranty covers.

Fulfillment of contract conditions: The contract with your homebuilder may contain conditions that have to be met within a certain time limit before you have a firm deal—mortgage financing or the sale of your existing home are the most common ones. Both you and your lawyer should get copies of any documentation related to the fulfillment of the conditions, and a copy should be forwarded immediately to your builder.

Estimates in writing: Get written, detailed estimates whenever possible. How much will it cost to insure your new home? What are the closing costs, including legal fees, disbursements, property transfer tax and registration costs?

Change orders and contract amendments: It is not uncommon to fine-tune some of the details or finishing touches on a house in progress. Homebuilders use change orders to keep track of deviations from the original contract and will give you a copy for

your insurance company, lawyer and others. The more you know about the final costs, the better you can budget, and the fewer surprises you will have on closing day (the day you take possession of your new home).

The walk through checklist: Your builder will invite you for a 'walk through' inspection close to the completion date. This is your best opportunity to point out any problems and have action taken to correct them.

Finally, don't hesitate to ask questions of your builder or air any concerns you may have. You are, after all, making a decision that could affect your entire life.

By: Frank O'Brien
August 16, 2001

Copyright 2001 Inman News Features
Distributed by Inman News Features