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When you decide
to buy a brand-new home, choosing the right builder is as important as choosing
your home. When you
purchase a home, you also "buy" the company that will build it. Your
satisfaction will depend on their experience, their skills and their commitment
to customer service. An important part of the home buying process lies in
determining that you are dealing with a builder who has these qualifications and
is able to meet your needs and expectations—for the home and for the buying
experience. What You Want To KnowThere are
thousands of builders in As you look at
homes and communities, also think about the company behind them. Before choosing
which one to buy from, take a close look at each builder you are considering and
ask these questions:
This fact sheet
will help you get the answers you need. Where Do I Start?Buying a home is
a major purchase that usually takes place over a period of time. From the day
you decide to buy a new home until the day you move in, the process can take a
number of months, or longer, to complete. New home buying
begins with research and a lot of legwork as you look at homes and communities,
and talk with builders. Before you get going, it is a good idea to do some
pre-planning. This will help you to focus on the decisions ahead and prepare you
for a successful house search. Define your
vision Get everyone in
your household involved in discussing what you are looking for in a new home and
community. For instance:
Make a list of
everything that’s important to you and divide it into things you must have and
things you would like to have. Use the list to help you evaluate each home and
community you visit. It is also a great starting point for discussions with
builders because it makes it easier to tell them what you are looking for, which
in turn helps them to identify the homes that best match your needs and wants. Get mortgage
pre-approval Early on, you
need to determine the price range that suits you. If you plan to finance your
purchase with a mortgage loan, sit down with your lender or mortgage specialist
to discuss your needs and get mortgage pre-approval. That way, you know exactly
how much you can spend on your new home. If you want to be able to make regular
payments to the builder during the construction of the home, talk with your
lender about a construction, or draw, mortgage. Pre-approval
means that your lender commits to giving you a mortgage loan up to a specified
amount at certain terms and conditions, including the interest rate. This
commitment will be valid for a specific period. Pre-approval doesn’t lock you
into the mortgage. You are still free to pursue other arrangements, including
getting a mortgage loan through a builder instead. Some builders offer
prearranged mortgages with their lenders, sometimes at advantageous rates and
terms. Begin your
search
As you go
through your home search, collect as much information as you can—pamphlets,
brochures, builder’s packages, product literature, warranty information and so
on. Read through it all and create a file of everything that interests you. Always carry a
notebook with you and write down information about the builders and the homes
that you see. If you don’t, it can be difficult later to remember the details
of a particular home or discussion, or to recall which builder said what. You
may also want to bring a camera along. When you keep track, it is easier to
remember to collect the right information from every builder you visit. It also
makes it much easier to compare the companies, their products, their selling
process and their reputation, when you are ready to make a decision. Who Is Who In Home Building?The type of
builder you will be looking for depends on the area you live in, and the home
you want. Here is a general overview of different types of home building
companies. Developers
are responsible for getting large tracts of land ready for building. This can
involve infrastructure and services (utilities, roads, sewers), community layout
and design, including recreational spaces—whatever it takes to turn the land
into a neighbourhood. Developers may also construct the homes, or the lots may
be sold to individual home building companies. Large
building companies specialize in building homes in bigger developments. These
companies generally offer a selection of homes designed specifically for the
development. Minor customization by homebuyers is usually permitted, but there
are usually limits to the amount of change possible. Most will also have a set
process for all aspects of the purchase, from the contract signing to the
pre-delivery inspection. Medium-sized
companies
range from 10 to 50 homes a year, depending on your region. Medium-sized
companies can be quite diverse—building in developments as well as on
individual lots; constructing single-family dwellings as well as townhouses and
other low-rise buildings. Small-sized
companies
build under 10, and often less than five homes a year. Custom
builders
build one-of-a-kind homes, each one usually designed and built for a particular
customer who may or may not already own the lot. The custom-building process
allows for complete flexibility, within the limits of municipal regulations and
what’s possible technically. Construction
contractor is another term for builder. Most commonly, it is used for
companies who are contracted by purchasers to build a home on land they already
own. Manufactured
housing builders construct homes in a factory and bring them to the building site
as panels, modules or fully completed units. The amount of work required on-site
to complete the home depends on the type and size of the building, the type of
foundation and the customization required. Selecting A Builder: A Profile Of The CompanyHome building is
a complex job. It takes 16 to 30 weeks (and sometimes longer), 45 different
skilled trades and thousands of components to construct an average home. It
combines many disciplines, from constructing a solid, energy-efficient structure
and installing state-of-the art plumbing, heating, cooling and ventilation
systems to fitting the home out with a wide range of products and finishes,
inside and out. It requires design and planning upfront, and careful management
throughout the process. Everything must be done within a context of municipal
and provincial regulations, permits, inspections and approvals. A home builder
needs to deal with it all, and do it well. Here are some of the questions you
can ask to find out about a builder’s skills, experience and professionalism.
Selecting A Builder: The Quality Of The HomesEveryone may
have a different idea about what makes a good home, but most people have a
strong sense of what quality means to them. Think about the specific
characteristics you equate with quality; make a list and check it against homes
you visit. If you don’t like the quality of a builder’s homes, there is
little reason to pursue discussions with the company. Go on to the next builder. Check model
homes
Not all builders
have model homes. Instead, they may try to arrange for you to visit the home of
past clients—this still gives the builder a chance to show you what the
company is capable of. Being in someone else’s home may temper your
explorations somewhat. However, it lets you see how the home stands up to daily
wear and tear, and possibly get some helpful information from the owner. Visit a work
site Ask builders you
are considering buying from if you can get a tour of a home in progress.
Visiting a home under construction offers a great opportunity to see the quality
inside the walls, floors and ceiling before everything gets covered up. While it
may be difficult for a layperson to evaluate construction techniques, there are
many obvious things to look for—straight lumber, smooth cuts, neat seams,
well-installed insulation, well-sealed air barriers, and so on. Again, you may
want to ask the builder if you can bring someone knowledgeable along for a
second opinion. Be aware though, that builders are becoming more restrictive in
their site visit practices, due to stricter legislation and growing liability
concerns. Whether the home
is being built on a single site or in a large development, you can tell a lot
about the builder by looking around the job site. Does it look well organized,
with tools and materials stored neatly and no garbage lying around? Are workers
wearing safety gear such as hard hats, boots and safety harnesses? Do they
appear to be working efficiently? Are they courteous? Do they seem to have a
good rapport with the builder? If you are
considering the purchase of a factory-built home, ask for a tour of the plant.
Many manufacturers also have a virtual factory tour on their Web site. Read the
builder’s information materials A builder should
be able to give you written information about the company and their
homes—brochures, packages or simple information sheets. In fact, large
builders often make a significant investment in glossy, colourful information
packages to help them stand out among competing companies. No matter the format,
look for substantive information—what do they offer, what do they tell you
about the homes, and where relevant, about the community? If not included,
ask for a list of specifications, i.e. an itemized description of the materials,
products and finishes that go into the homes—this should also tell you
what’s "behind the walls", such as insulation. Take note of the
standard features that are included in the basic price of the home. Compare this
to the builder’s model home—if a feature is not listed as a standard, it is
most likely an upgrade or option that you will have to pay extra for. Also check
the specifications against the builders’ printed renderings, or drawings, of
the exterior of the home—builders often take artistic license in their
marketing materials. Check out the
community If you are
considering buying in a new development, the community itself will be a factor
in your decision. The developer will have created a detailed master plan
covering everything from the location of each home to street design to
recreational facilities. Ask for a detailed description or even better, for a
personal tour of the community. There may be a
scale model or map in the sales office that can help to give you a realistic
impression of the community when completed. The sales representative should also
be able to give you a sense of the people who have bought in the community to
date—for instance, are they young families with children or empty nesters? It can be
difficult to get a sense of a community when it is still a construction site.
Ask for the location of projects that were completed in recent years and take a
walk or drive through them. Look at the streetscape, the landscaping of communal
areas, the layout of the roads and pathways and other features—is the
community attractive? Has it stood up over time? Is this similar to what you can
expect in the community you are looking at? When you are
considering a specific lot, ask about things that could affect your enjoyment of
your property, such as community mailboxes next to your lot, or a bus shelter
directly across the street. While it may not be an inconvenience to you, you
should know about it in advance. And while you are looking at the lot, get a
sense of light and sun patterns—for instance, will you get the morning sun
where you want it? Finally, the
salesperson should be able to answer any questions you have about schools,
hospitals, shops, traffic, public transportation and so on, that could influence
your decision. Selecting A Builder: The
Home Buying Process Every company
has its own way of doing business. Even if you really like a builder’s homes,
you still need to be sure that you will be comfortable buying from this
company—it has often been said that the single most important key to a
successful new home purchase is a good working relationship with the builder. At some point
during your house search, you need to start talking business. This can happen as
you visit sales offices or model homes, or you can call builders or their
salespeople, depending on the size of the company, to arrange a meeting. Think
of these meetings as an interview—you are interviewing them to find out if you
want to buy from them. Bear in mind, that they are interviewing you at the same
time to find out whether you are able to buy from them, and what kind of
customer you will be. Talk about your
new home—your vision, your needs, your desires and the price range you are
considering. Let the builder know which of the company’s models and floor
plans appeal to you. Or alternatively, ask them to show you different models and
plans that reflect your vision and fit your budget. Ask questions The key to
getting information is to ask questions. Don’t worry that you are demanding
too much or that some of your questions may seem obvious to others—ask about
all the things that are important to you, both about the house and about the
buying process. It is a good
idea to write down your questions in advance; it helps you stay focused and
ensure that you get the information you need in order to make a decision. Here
are some suggestions:
Throughout the
discussions, also note the following:
It can take
several visits and a number of conversations before you have covered everything
to your satisfaction and feel that you are ready to make a decision. Don’t
rush. Take your time and make sure that you have a good sense of each company
that you may be considering— how their process works, how they would treat
you, and what it would be like to buy from them. Selecting A Builder: Warranty And After-Sales ServiceYou will also
want to take a close look at builders’ warranty and after-sales service. You
need to know that your builder will stand behind the home, that the company’s
commitment to you goes beyond the closing day, and that you have access to
recourse if anything goes wrong. Warranty When you are
interviewing builders, find out about the warranty provided on their homes. Ask
them to explain what’s covered and for how long; also ask for written
information that you can read through at home to become more familiar with how
the warranty works, and what’s included and what’s not. It’s important to
have realistic expectations from the outset. Builders
commonly offer a one-year warranty and aftersales service on workmanship and
materials in your new home. This "promise" to customers is most often
backed up by a third-party warranty. As noted earlier, third-party new home
warranty is mandatory in British Columbia, Ontario and Quebec; elsewhere it’s
optional. While varying
from one province to another, third-party warranties generally include coverage
and provisions for:
As a home buyer,
you should think very carefully about buying from a company that doesn’t offer
a third-party warranty. It doesn’t necessarily mean that they don’t build a
good home, but it does mean that you may be taking a risk. A builder’s own
warranty is only as good as the level of service the company decides to provide,
or for as long as it stays in business. If something goes wrong, will your
builder be able to deal with it? Will the company still be there? Also, will it
affect your ability to get financing? Lenders may require your home purchase to
be protected with a third-party warranty as a condition of giving you a mortgage
loan. Fortunately it is not difficult to find builders that offer this extra
protection. To get
third-party warranty on your home, you must buy a home from a builder who
participates in a warranty program and who will register your home with this
program. Warranty providers can tell you if a builder is a member and provide a
list of companies. In provinces where third-party warranty is optional, it’s a
good idea to contact warranty programs for the names of professional home
builders before you begin your house search. Once you have
decided on your home, you should also make sure it is registered with the
warranty program—ask the builder for proof, or contact the warranty provider.
Most providers have a Web site with helpful information, or you can call them
directly for information, or with specific questions or concerns. Warranty
coverage usually begins when you sign a Certificate of completion and/or
possession, following a pre-delivery inspection just before you take possession
of your home. During this
inspection, anything left to do in the home should be written down and included
with the certificate, down to the smallest detail on missing items or things
requiring repairs. The builder is obliged to take care of all items on this list
before you move in or shortly thereafter, with the exception of "seasonal
holdbacks", which are items that have been delayed due to weather. For
detailed information, ask the builder or call the warranty provider. After-sales
service Ask builders to
explain their after-sales service policy–what can you expect from the company
once you have moved into your new home? If there are items outstanding, when
will they be completed? How should you deal with warranty items that may emerge
later? Who can you call if you have any questions? What if you have an emergency
and need immediate help? Knowing upfront
that your builder has a well-defined after-sales service process helps to take
the anxiety out of your purchase decision. While varying from one company to
another, the process will typically include a number of contacts and visits to
your home, as required.
Larger companies
may have a separate service department; as a minimum, there should be an
appointed contact person or number for service. Your builder should also outline
what to do in case of emergencies, when you need immediate assistance. There may be
other aspects to the builder’s after-sales service. Some companies contact
homebuyers a month or so after move-in to see how they are doing in their new
home, and to ask questions about the home buying experience. This is a chance
for you to discuss any thoughts you may have, negative or positive, about the
company and your home, and for the company to find out how it’s doing and
where it may need to make improvements. Other builders may stay in touch with
their customers through newsletters or bulletins, providing updates on the
community, seasonal homeowner advice and other information of interest. Maintenance Before handing
the home over, most builders will give you an "orientation" tour to
show you how everything works—how to operate and maintain the mechanical
systems, for instance. This is usually done at the same time as the pre-delivery
inspection. Many builders
will provide you with a homeowner’s manual describing the various elements of
your home and setting out the requirements for regular maintenance and service.
This not only helps you to keep your home in great condition, it also helps to
ensure that you don’t void the warranty on your home. Failure to follow the
builder’s or manufacturer’s instructions may mean that they are not
responsible for any repair work needed. Canada Mortgage
and Housing Corporation has developed a Homeowner’s
Manual with practical information about homes and their upkeep, including
lots of easy-to-follow instructions, illustrations and photographs. Contact CMHC
for more information at 1-800-668-2642. Selecting A Builder: What Others SayA company’s
reputation is an important consideration when choosing your builder—how do
others see the company, what kind of experiences have they had with the company,
and would they recommend that you buy from this builder? Previous
buyers Builders should
be able to give you a list of references —past customers who have bought from
them within the last couple of years. Do check the references— too often
homebuyers neglect this step. Don’t worry about disturbing people; they have
agreed to let the builder give out their names and will not mind you contacting
them. Before you call,
make a list of questions you would like to ask, such as:
You may also
want to do a random check of past customers. Visit communities on a Saturday
morning and talk to people who may be outside doing chores, "I’m
considering buying a home from such and such builder. Can I ask you a few
questions about your home and the community?" Most people are happy to talk
about their experiences and offer their opinion and advice. Warranty
programs Check with the
new home warranty program(s) in your province to see if a builder you are
considering is a member, and to learn about their track record—e.g. the number
of claims and conciliations. Some programs provide this information online;
otherwise contact them by telephone. Better
Business Bureaus Better Business
Bureaus (BBBs) can tell you if there are any complaints against a company. They
don’t recommend or evaluate, they simply share information that other
customers have taken the time to report, good or bad. If there are complaints on
file, you can also find out if they were resolved, but bear in mind that a lack
of negative reports is not a guarantee. If the builder is affiliated with other
companies, subsidiaries or parent companies, you may wish to inquire about
complaints against those companies as well. You could also ask if the company is
a member of the BBB since membership can indicate a commitment to
professionalism. Call the BBB in your area, or access it through the Internet. Local Home
Builders’ Associations Many home
building companies are members of the Canadian Home Builders’ Association, the
national organization representing the residential construction industry (www.chba.ca).
Contact the local home builders’ association in your community—they cannot
make recommendations for individual companies, but they can tell you if someone
is a member in good standing and provide a list of member companies. In Quebec,
contact l'Association provinciale des constructeurs d'habitations du Québec (www.apchq.com). Others While well
acquainted with the builders in their community, municipal building departments
are usually not in a position to make specific recommendations. You might be
able to find out from sub-trades (e.g. plumbers, electricians) what a particular
builder is like to work for. However, be aware that these people may have an
ongoing business relationship with a builder and may hesitate to offer opinions
and recommendations. Selecting A Builder: Comparing CompaniesYour choice of
builder will have a big impact on your entire buying experience. It is also key
to your satisfaction with your home. As you get ready to make the final
decision, carefully look over all the information you have collected and compare
builders to determine who offers the greatest overall value for your investment.
There are a number of areas to consider: Price The first point
of comparison is often price—how the price of one builder stacks up against
those of others. Price is important, of course, but you are well advised to
consider carefully what’s included in the price, and what’s not. Compare
standards and upgrades. The standard features offered by one builder may be an
upgrade and cost extra with another company. Some builders include a wide range
of features in the basic price of the home; others include far fewer features or
use products of a lower quality to keep the price down. Look closely at
the bottom line. Beyond upgrades and options for your home, what other
additional items will builders charge you for, if any? From utility hookups to
tree planting, a builder’s extra charges can add significantly to the cost of
your home. When it comes to
taxes, make sure you are comparing "apples to apples". Some builders
include the GST/HST in the price quoted, as well as the GST/HST New Housing
Rebate. Others don’t, and you may need to calculate the tax as well as the
rebate, when applicable, in order to compare prices effectively. To find out
more about the GST/HST new housing rebate, call your local Canada Customs and
Revenue Agency office or check www.ccra-adrc.gc.ca. As you are
comparing prices, remember that the old adage of getting what you pay for holds
true for home buying as well. Quality construction, attention to details, the
use of brand-name materials and products, and good before- and after-sales
service come at a cost—it may not be wise to select a home based on its price
alone. Quality Compare the
quality of the labour and materials from one builder to another. Is the
construction quality satisfactory? How does the finishing compare? Does a
builder use standard products and finishes of a good quality, or do you have to
upgrade many items to reach the level of quality you’d like? Are you
comfortable with the brands used by a builder, are they warranted and for how
long? Also consider
the quality of the "living environment" that each builder offers. Are
their designs attractive, and will the layouts work well for your household? Are
they paying careful attention to light, heating, cooling and ventilation—in
other words, creating a healthy, comfortable place for you to live? Warranty Compare the
builders’ warranties. Do they all offer a third-party warranty on their homes?
If not, you could find yourself without protection if something goes wrong
before, during or after construction of your home. At the same time, not all new
home warranties are the same; in provinces with several warranty providers, you
may need to compare different warranty programs offered by different builders. After-sales
service Part of the
confidence of buying a home from a reputable builder comes from knowing that you
can rely on the company to continue to provide service after you have moved into
your new home. This could mean dealing with warranty items, responding to your
concerns or just staying in touch with you to make sure you are enjoying your
new home. Compare: does a
builder have a clear after-sales service process that’s written down, with
milestone check-ups? A separate service department? A separate telephone number
with a 24-hour emergency line? A clear policy on returning phone calls from
homeowners? A good track record? Personal
comfort Last but not
least, you need to select a company you feel comfortable with. The
"personal fit" between you and your builder, or the builder’s
representative, should be an important part of your decision. You may respect
a builder’s credentials and appreciate the quality of their homes. You may
learn that a builder is highly valued and recommended by past customers. This
doesn’t automatically mean that this is the right builder for you. A satisfying
home buying experience depends on open communication, a good working
relationship and mutual trust. Consider what it would be like to build your home
with each company and compare. Does the company’s approach to the buying and
building process work well for you? Will you be able to work well with the
people in the company throughout it all? Does the company offer the kinds of
information, assistance and reassurance that you want? Are there any
restrictions that you would have difficulty with? Do you feel confident that
they will deliver the home you want? Making the
final decision Carefully
compare the builders you are considering—who they are, what they offer and
what they would be like to buy from. Then choose the company that offers the
best overall value and quality, and gives you the greatest sense of confidence. Once you have
selected the builder, you are ready for the next step—working out the details
of your new home and putting it in writing. Before you sign a contract, ask your
lawyer to review it. No matter how carefully you have selected the builder, you
still have to take all the necessary precautions to protect yourself and your
investment. Then you can enjoy the home buying experience and look forward to
the day you move into your new home. |
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