The final two mistakes new home buyers make and how to avoid them:
Not anticipating hidden closing costs
Many closing costs when you sign your purchase agreement are estimates only. As you approach your possession date these costs can start to escalate. You may find yourself with some pretty outrageous charges; everything from mortgage discharge fees, deposit verification fees, and gas and electricity hookup fees. Pay close attention to the adjustments and ensure you put a cap on certain items. Some may be removed all together.
Not buying at the right time
Knowing when to buy a condo or new home can be the key to saving thousands of dollars. With a new home build, the builders generally raise initial funding through VIP pre-sales which is reserved for realtors who specialize in these types of property. Once the VIP event is over, it’s open to regular realtors, and finally the public. By the time that happens, usually 50% of the units have been sold and the price could be driven up 3 to 4 times the original cost. Trying to get into a VIP event is not difficult and could save you thousands. Be warned though, that this could also be risky. If you buy early and the market turns, you could be stuck with a contract price thats much higher than the value of the unit.
Time of year is also important. In Toronto, summer is the best time to shop, since most people are on vacation. When times are slow for the builder, you have more bargaining power. December and January is also lucrative for new home buyers.
Keep these tips handy when buying a new home, and save yourself a load of hassles down the line!
