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The rules fall away when it comes to buying new

Buyer beware. The Alberta Real Estate Act does not cover New Home Builders.
Builders are the same as a For Sale By Owner. Builders do not owe Buyers anything. Builders can say and do whatever they want.
Have you ever tried to buy a used car from a small car lot? You need to be just as careful when you are buying from a Builder.
Remember nothing the salesman says counts if it isn't in writing on the contract. Keep your head up.

A good question. The usual question when you walk into a show home.

The answer - no matter what it is - isn't likely to be the price you pay.

You have to know the answer to ask the question to get the answer.
How are you supposed to know what is an option or "extra"?

Here are some questions to ask about the price of the showhome:
How much is this exact home?
Just to be sure, ask:
What is the price for the exact same square footage, the same layout, finishing and options?
Does that include the lot?
How much more for a non-corner lot of the same size?
What is the price for the exact same basement development?
Did you include the exact same cabinets in the price?
Same hardware?
Same lighting?
Same fixtures?
Same flooring?
Same trim?
Same fireplace?
Same Appliances?

What deck is included?
What landscaping is included?
What does that landscaping include exactly?
Front and Back?
Is any fencing included?
What sidewalks are included?
Front and back?
What driveway?

I could go on and on.
You might as well print this list off and take it with you. Fill in the blanks and try to get the salesman to sign it or include it with the contract.

This is only the beginning; you still need to get your offer accepted. I will do a separate section on that.
And then you want a definite move-in day. You need to know when to give notice or start selling your home.

Buying a New Home can be very frustrating. Just try to educate yourself, be patient and look after yourself.

New Home salesmen seem to fight over customers.
One salesman spent hours and days with a customer working on the floor plan, options and prices of a new home.
One day when the Salesman was not there, the customer talked to another Salesman (same Builder, same house).
He told he lots were "going fast". He asked her for a unsigned blank cheque to fax to head office "to show her interest in a specific lot; no obligation".
She felt she had made an mistake, so she called the first Salesman.
Suddenly, the first Salesman was out and she had to deal with the second Salesman even though she didn't like or trust him.

If Salesmen treat the people they work with every day like that, how do they treat strangers? (Believe me, you do not have a relationship with them.) What is their code of ethics?

New Home Salespeople do not have CLIENTS, just CUSTOMERS.
They do not owe you - a customer anything. No fiduciary duties like loyalty, trust, obedience, confidentiality, full accounting, full disclosure, reasonable care and skill. They sell; you buy. That's it.

Let's discuss FULL DISCLOSURE:
New Home Salespeople do not have to disclose information that might affect the value of the property. Wouldn't you like to know that a freeway or a mall or a service station has been approved for the property adjoining yours?
The Real Estate Act stipulates Realtors must disclose all information that affects the value of a Property - wouldn't it be a good idea to have Builders provide similar information to New Home Buyers?

A salesman told me a major road less than 25 feet from the New Home he was selling would not be re opened. I checked, it was and is a major connector to Anthony Henday.
Another said not to worry about noise on 80th avenue & 102 Street as the CPR round house was probably going to be moved right away.
He just threw that comment out. Nothing to substantiate it. And nothing to hold him to it.

Please protect yourself. Take notes. Verify statements re adjoining property with City Planning. Have all statements made by the salesman put on the contract.

For your own sake, before you commit to any lot, call City Planning or go to the website and find out exactly what is going to happen to the land near your new home. REMEMBER TO GET THE NAME OF THE PERSON YOU ARE TALKING TO AND TO WRITE DOWN WHAT THEY SAY.

Location is your MOST IMPORTANT DECISION when purchasing a new home. Location is the biggest factor in the real and resale value of your home. Once your home is built,you cannot change location.

Your home's location does not matter to the builder at all. In a few months, your money - his profit will be in the bank. The builder will be selling homes in your subdivision or another development.
But location means $$$$$ tens of thousands of dollars to you. For example, SHOWHOMES are usually on CORNER LOTS but are not a bargain because they are filled with extras. Buyers of resale homes will not even look at homes on corners - there goes your equity.
New neighborhoods do not have SCHOOLS and recreation facilities. That means more driving for you as well as unhappy children spending hours of their lives travelling.
Newer homes often do not have fences and landscaping. Your home may be completely fenced and landscaped but if your neighbor's yard is a wreck, your home's value is negatively affected.
If your neighbors don't have garages, cars are parked helter skelter like in a ghetto.
All of this will cost you money later.

Builders look for the cheapest land they can find.
Builders must keep costs down - every penny counts. MULTIPLICATION: If they are building 200 homes, paying an extra one thousand dollars per lot means $200,000 to the builder.

You, the Home Buyer will only spend the $1000 once. Paying $176,000 instead of $175,000 for a home in a good location is a good investment. The extra $1000 will cost about $5.00 per month and return much more in resale value.

The subdivision plan offered by the builder is easy to misunderstand. The lots are usually surrounded with green which we easily interpret as PARKLAND. Wrong! The drawing does not disclose the zoning or plans for the areas adjoining the available lots. You look at the drawing and choose a lot with a harmless looking road to the rear which ends up being a major thoroughfare. Down goes the value of your home.

Let's discuss FULL DISCLOSURE:
Unlike Realtors, New Home Salespeople are not required "to disclose information that might affect the value of the property". Wouldn't you like to know if low inclome housing, a freeway, a mall or service station has been approved for the property adjoining yours?

A salesman told me a major road 25 feet from the New Home would not be re opened. I checked, it was opening right away as a major connector to Anthony Henday.
Another said not to worry about noise on 80th avenue & 102 Street as the CPR round house was probably going to be moved right away.
He just threw that out. Nothing to substantiate it. And nothing to hold him to it.
Please protect yourself. Take notes. Verify statements re adjoining property with City Planning. Have all statements made by the salesman put on the contract.

Remember, you are entitled to a copy of everything you sign - before they take it "for approval by the manager".

If it isn't on the contract, the salesman didn't say it.


1) The salesman does not owe you any duty of confidentiality. He has been asking you questions ever since you walked in.
Everything you told the New Home Salesperson (such as how much you like the househow or much money you have for a down payment or your bank approval) can be used against you in the negotiations.
Just before they start to fill out the contract, they may ask you to fill out an information sheet that discloses a lot of normally confidential personal information. Obviously, that will give them an advantage in the negotiation. And people just fill it out like sheep.

2) You are not allowed to deal directly with the decision maker. (The salesmanager is usually in another location.)

3) The contract is taken away & you lose control of your negotiation.

4) The busiest day is Sunday but Builders are closed Monday, so after you make a commmitment, sign the offer and give them your deposit ... you are left hanging for days.

5) Unless you have taken notes from day one, important promises may be left off the contract. Every question you asked was a waste of time if the answer is not on the contract.

6) When Builders are busy, they will not commit to a completion day which means you cannot make plans re selling/moving for months.

7) There are no rules for multiple offers.

8) You think you have a lot held, but it may get sold out from under you.

9) The contracts are about four pages long with printing on the back. A lot of reading when you are excited about getting a new home. The back is an important part of the contract but it's rarely read.

10) You are encouraged to use their lawyer as well as their bank. Just imagine the day the home is to be completed arrives and it isn't ready. You have given notice and don't really want to camp in an uncompleted home. What would the builder's lawyer do? Send the money anyway? What would happen if you had your own lawyer? Hotel? Price adjustment?

Now is the time to work on the resale value of your home. I know, you are never moving again. But what if you have triplets or get offered your dream job or get married/divorced or win the lottery home or NEED A LINE OF CREDIT TO START YOUR OWN BUSINESS?

The down side of getting one of the first homes in a new area is that when you want to sell you may be competing against a NEW HOME in the same area. It's difficult to say "Pay me more for a house I have USED for a year and a half." Buyers want to buy new for the same reasons you do. Their choice of decorating and not starting off fresh and new.
You may have to take a loss to compete with the New Houses that are available in the same neighborhood.

To get the most out of your home later, make sure you choose the best location possible. Avoid corners, busy roads, being too close to multi-housing, noisy streets and power lines.

Try not to adjust the design to the point where no one else can live there without major renovations. I would never accept a design that I could not view (inside and out) completed.

New Neighborhoods haven't really established their personality. When Buyers start looking, their first questions concern the type of people that live in the area. Schools. Crime. Transportation.

Its a crap shoot. For example, you may think you are saving money by choosing an area with no garages. 3 years later, it looks like a ghetto with old cars parked everywhere. Or your neighbors may not ever get around to getting rid of their clay yards or putting up a fence. That will cost you money.

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