So you’ve decided to buy a brand new home, built from scratch – how exciting! The builder has a salesperson who seems very knowledgeable and the price is non-negotiable. Is there any reason to have your own realtor?
Well, that salesperson acts for the builder, not for you, so my short answer is “yes.”
I recently helped a client navigate the purchase of a new build condo. I prepared a long list of questions (these appear on a previous post). These included things like, for example, where the HVAC was going to be located (turns out the A/C was going to be on the balcony, which would reduce the usable space, but not on the roof above, which can be noisy), and whether there was any rental equipment where the costs would be passed onto the buyer (yes, a tankless hot water system, at $ 40/month). I won’t go over them all again, but there were probably a good twenty or thirty things I wanted to have information about so I could make sure there were no red flags.
I negotiated a $ 5,000 decor upgrade package for her as well, as an incentive. That upgrade meant she could put in granite countertops and a granite breakfast bar instead of laminate and also covered the cost of a deeper, double stainless steel sink and a kitchen faucet.
In a new build condo in Ontario, the buyer has a ten day cooling off period under consumer protection legislation where they can change their minds, no reason required. Most use that time period (or should) to have their lawyer review what is often a very lengthy, confusing agreement.
I referred my client to a lawyer who deals with the new condo builds even before we had an accepted offer from the builder’s head office (i.e. before the ten day period began) so that we could get that review done quickly. To do so, I got a copy of the draft deal from the sales centre and sent it to the lawyer for review.
The reason for wanting to move quickly was because the sooner we reached an accepted offer, the sooner the builder would move to finish the unit, and my client wanted a summer move-in date, so earlier was better.
I followed up on things like making sure the decor package was referred to in the written agreement and that the parking spot that was pointed out to her during her site visit appeared in the schedule. I also liaised with the sales centre, lawyer and client, and made sure that verbal promises were put in writing.
After the legal review was completed by her lawyer, and we got a final copy of the accepted offer, I made sure that it said what it was supposed to say and that my client’s lawyer signed off on the changes.
Then, with the deal firmed up, I went to the Design Centre with my client to help pick out finishes. While we were there, she mentioned that the salesperson at the Sales Centre had shown her a different type of hardwood/stain than the designer indicated was standard; I was able to negotiate the inclusion of that hardwood for free for her as well. The value of that upgrade was about $ 1,000, so in total, I saved my client $ 6,000. in decor upgrades.
The builder, I should mention, pays my commission so none of these services cost my client a penny. She’s thrilled, and I feel that she got good value by having me involved.
One thing you should know if you do wish to use a realtor is that most builders require that the client be registered by their realtor when they first show up in the showroom , or they won’t cooperate with us (i.e. won’t pay us a commission). So if you want a realtor’s help, don’t just drop by the Sales Centre — call your realtor first so s/he can set things up with the builder directly. Sometimes they want us there; other times, they agree that it’s okay for us to register later, but if you don’t give us that opportunity, we can’t help you at all.
And remember — that ten day cooling period only applies to new build condos. If you’re signing an offer for a house or a freehold townhouse, once you sign on the bottom line, you’re bound by the contract. If it doesn’t give you a ten day grace period to have your lawyer review the deal, you could find yourself stuck with terms you don’t like. All the more reason to have your own realtor to advise you.