Click through the links below to view each step:
Step 3 Agree to Buy Your New Home
Once you have made a decision to buy and made arrangements with your chosen builder, the next step is to review and sign the Agreement of Purchase and Sale A legal document that states the buyer’s desire or interest in purchasing the property.
Agreement of Purchase & Sale
The "Agreement of Purchase and Sale" is the legal document that puts your agreement to purchase the completed home in writing. Before the purchase meeting with your builder, it’s a good idea to review the purchase agreement with a lawyer so you can be prepared with any questions you have for your builder. The Agreement of Purchase and Sale will also include the Warranty Information Sheet, which will provide a basic overview of the warranties and protections that come with your new home. You should schedule plenty of time for the purchase meeting and don’t let yourself be rushed. Making a purchase of this size is a huge decision and can feel overwhelming, which is normal. Don’t be afraid to ask for more time or for something to be repeated multiple times to ensure that you have fully understood the message that your builder is delivering.
Deposit
A deposit is the money you submit during the agreement of purchase and sale process to secure a property you wish to purchase. It demonstrates that you have the financial means to make the purchase and you are comfortable taking on some level of risk until the deal closes. Legally, the builder is the owner of the new home until your deal is completed (i.e. “closes”) and you become the new owner of the home (i.e. “take possession”). This means that while the home is under construction, the property is legally owned by the builder.
Tips for
Reviewing Your Agreement
Please consider the following tips when reviewing the Agreement of Purchase and Sale A legal document that states the buyer’s desire or interest in purchasing the property.
- The "Agreement of Purchase and Sale" is a legal document. It is important that you work with a real estate and/or a condominium lawyer to conclude your purchase. Before you sign, be aware of your rights as a new home buyer. You should review the agreement document with your lawyer before signing and make sure that any agreements that were made between you and your builder or sales representative, are reflected in writing in the agreement.
- Find out when your builder will begin construction and how you will be notified if there is a delay. Be sure that you and your lawyer document all details regarding any deposits and delayed occupancy. Under the Ontario New Home Warranties Plan Act, newly built homes in Ontario have warranty coverage provided by the builder and backstopped by Tarion. Through this plan, there are two important elements of your Agreement of Purchase and Sale that you should talk to your lawyer about:
- An Addendum that provides additional information, including your rights concerning any delays in construction.
- A requirement for a deposit for your home and an explanation of the deposit protection coverage administered by Tarion.
- Before you sign the agreement, be sure you have clarity on all matters, including elements such as the price of the home, reimbursable expenses, financing, and change orders. As this is an agreement between you and your builder, it is important that your builder is open to discussing any changes you feel are important. If your builder says no to a discussion about changes, you should reconsider whether you should sign the agreement.
- Ongoing communication with your builder is critical to the success of your relationship. At this meeting, be sure to gain an understanding of all communication you can expect with your builder throughout your journey from purchase, to construction, through to occupancy. Some key questions to ask are:
- What level of customer service can you expect after the sale goes though?
- Who should you contact if an issue arises? Who should you contact in the case of an emergency?
- When should you expect to be contacted by the builder to make selections for interior and exterior finishes in your new home?
- Who will contact you about scheduling your Pre-Delivery Inspection (PDI) and how should you prepare for this?