first time new build
The Definitive 5-Step Guide for First-Time New Build Buyers in Milton
Buying a brand new home straight from the builder is exciting, but the process is completely different from buying a resale property. This guide breaks down the five most critical stages you’ll face over the 2-3 year journey, ensuring you avoid costly mistakes and feel confident at every step.
The moment you sign the Agreement of Purchase and Sale (APS) with the builder, a strict 10-day cooling-off period begins. This is the single most important phase of the entire process, and it requires immediate action.
What you MUST do:
Financial Scrutiny: Your lender must approve your deposit structure and verify your ability to carry the mortgage upon closing (even though closing is years away).
Legal Review: You must have a lawyer specializing in new construction review the APS. Builder contracts are heavily weighted in their favor, often containing clauses about delayed closing, adjustments, and development charges. Your lawyer’s job is to explain the risks and ensure you are protected.
Actionable Advice: Treat these 10 days as a deadline to confirm you are financially and legally comfortable with the purchase. If you back out after this period, you will lose your deposit.
Unlike a resale home where you typically put down one deposit, new builds require a staged deposit structure over the first few months. This is often an aggressive financial commitment that first-time buyers must budget carefully for.
TIMELINE
AMOUNT DUE
PURPOSE
Signing APS
$30,000
Initial Commitment
30 Days After Signing
$30,000
Second Instalment
90 Days After Signing
$25,000
Third Instalment
120 Days After Signing
$25,000
Final Instalment
Total Deposit
$110,000
Paid over the first four months.
Key Takeaway: You need access to the full deposit funds very early in the process, not just the first cheque. Plan your liquidity and budget for these payments over the next 3 to 4 months.
Around 12 to 18 months before closing, you will be invited to the builder’s Design Studio. This is where you choose everything from flooring and paint colours to cabinets and light fixtures. While fun, this is where your budget can quickly spiral out of control.
The "Bones" vs. "Lipstick" Rule
PRIORITIZE THE BONES: These are the structural upgrades that are impossible or extremely expensive to change later. Focus your budget here first, as they add the most lasting value:
> Structural Changes: Ceiling height (9-foot vs. 8-foot), adding windows, moving walls, or choosing a different shower/tub configuration.
> Kitchen Layout: Selecting premium cabinetry height or ensuring a kitchen island has electrical service.
BE SELECTIVE WITH THE LIPSTICK: These are aesthetic, cosmetic features you can easily upgrade later on your own for less money.
Examples: Cabinet hardware, backsplash tile, light fixtures, paint colour, and basic flooring upgrades.
Actionable Advice: Go into the Design Studio with a strict budget for upgrades (e.g., max 5% of the purchase price) and stick to the "bones" that impact the function and long-term resale value of the home.
Tarion is Ontario’s New Home Warranty Program. It provides essential protection for your investment, but you need to understand what it covers and for how long.
1-Year Warranty: Covers major defects in materials and workmanship (e.g., leaking, squeaky floors, poor caulking).
2-Year Warranty: Covers water penetration, electrical, plumbing, and heating systems, and violations of the Ontario Building Code.
7-Year Warranty: Covers major structural defects.
The Pre-Delivery Inspection (PDI)
Before you take possession, you will attend the PDI. This is your chance to document every visible issue, no matter how small. Do not rush this step. Bring an experienced friend or hire an independent inspector to meticulously check:
> Scratches on windows and appliances.
> Non-functioning outlets, doors, and windows.
> Missing items or deficiencies against your purchase agreement.
Every item noted on the PDI must be addressed by the builder under the Tarion process.
The closing is when you take possession and pay the final balance. First-time buyers often forget about the substantial costs due on closing that are not included in the purchase price.
Land Transfer Tax (LTT): Calculate this amount for the purchase price. First-time buyers in Ontario are eligible for a rebate, but you must still budget for the full amount and apply for the rebate later.
Development Charges & Levies: These are costs charged by the municipality for infrastructure (roads, sewers, schools). The builder will charge these to you. In HEV, your agent should work to get these capped in the APS to protect you from unexpected increases.
Utility Hookups: Fees for connecting gas, electricity, and water meters.
Legal Fees: Expect between $2,500 and $4,500 for legal services related to a new build.
Don't navigate this complex and multi-year process alone. An experienced agent who specializes in new builds, can help you negotiate better clauses in the APS, budget for upgrades, and ensure your closing costs are capped.
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