It can be easy to get swept up in home buying fever and forget to consider the future or plan your budget. There's a reason why nearly one-third of homes sold in Canada are new: a new home has modern features, reduced maintenance costs, and better energy efficiency.
However, that doesn't mean building new or choosing a quick possession is without pitfalls. When looking for your next home, here are nine buying mistakes you should avoid.
Mistake #1: Making Last Minute Changes
Sometimes buyers try to make spur-of-the-moment changes that seem simple but have the potential to throw the entire project off budget and deadline. Don't begin your build until you're satisfied with what you see on paper and you're sure you've chosen the right floor plan for you and your family.
Mistake #2: Poor Planning Of Space
In order to maximize your storage space in a new home build, proper space design and planning are important. Consider where you want storage and closets. There should be a closet in every bedroom and main hallway, but too much storage can take away from your living space. Consider how you will use your home throughout the year and plan your storage accordingly.
Mistake #3: Not Planning For The Future
While you want your home to work well for your current lifestyle, it should also accommodate any changes you may make in the next five to ten years. Will you need extra bedrooms for children? Will it be easy to add safety features for a young child? Do you need to consider your needs once you reach retirement, or do you plan to move before that point?
Mistake #4: Not Getting An Inspection
When you buy a new home in Alberta, there are two instances where it's important to have a home inspection. The first is the mandatory pre-delivery inspection with your builder right before you take possession. The second inspection should take place about one month before your home warranty expires. In Alberta, the broadest section of your new home warranty expires 12 months after your possession date.
You may want to hire a professional inspector to do the second walkthrough at this point as any major defects should be evident.
Mistake #5: Buying At The Wrong Time
If you're planning to buy a new townhome or duplex, try to get into the development as early as possible. Builders generally raise funds for a new development through pre-sales, which begin as invitation-only events. From there, sales extend to the public. Once the properties are available for general public sales, a good percentage of them will be sold already and the prices will have increased.
Mistake #6: Falling For The Show Home
Love the model home you toured? Great! Just keep in mind almost everything in the model home is an upgrade that costs extra. Your new home can look just like the show home if you want, but make sure it fits your budget. Depending on your budget for your new home, you may need to decide what's most important to you. As you tour the show home, try writing down what you loved the most and ask which features come standard.
Mistake #7: Not Doing Your Homework
Perhaps the most important research you can do before you buy a new home, townhome, or duplex from a builder is to find out as much as you can regarding their reputation. You can check for any prior projects the builder has completed in the past, investigate any complaints made against them, find out if they have won any awards, and read testimonials or reviews to learn more about the builder's history.
Mistake #8: Entering A Construction Zone
While this isn't exactly a "mistake", you need to be prepared for what comes with buying a new home in the early stages of a development. Depending on the phase of the development where you buy your new home, you may be moving into an ongoing construction zone.
Although there are many benefits to being first in a development (including first choice of lot and increased value), there can be noise, dust, or access points that change. In the case of a townhome or condo, you may end up taking possession of your unit before common elements are finished, such as the landscaping and community amenities.
Mistake #9: Not Enough Down
Although homeowners are only required to put a minimum of 5% down towards a new home, anything less than 20% down will require mortgage loan insurance be added to your monthly mortgage payments. For this reason, it's better to save a little longer for your down payment as mortgage insurance will ultimately cost you more over the long term.
Although it's easy to get caught up in all the excitement of buying a new home, make sure you don't get ahead of yourself and forget the details! By being aware of a few common mistakes, like the ones listed above, you are sure to save yourself time, stress and money throughout your home buying journey.