The Hidden Costs Of Buying New

By: Joshua Campbell

The Hidden Costs Of Buying New

Tags: new homes, real estate, Toronto, buying

 

2 minute read.

The New Home Building Industry is a competitive marketplace.  If you live in the York Region area, you’ve probably become used to seeing all the developments under construction over the past ten years or so.  Usually there isn’t just one builder in the area, but several so buyers tend to do a lot of comparison shopping. 
 
The majority of the time, a buyer’s decision will come down to price.  Which home builder offers a better value?  More house for the money, bigger lot, more upgrades?  If a particular builder offered everything at a slightly lower price, it would be a no-brainer decision. 
 
BUT WAIT!  Did you ask the right questions?  How about the fine print?  There are a lot of additional costs that you are responsible for paying when you purchase a newly built home.  Some builders include it in their price, but most don’t.  Some builders have caps (or maximums) for how much these fees and levies could be and some don’t.  It is vitally important to make sure you have all of these answers before you go and hand over your deposit cheques.  Ideally, you should take the agreement to your lawyer for review before committing.  Having worked in the new home industry, let me give you some insight into some of the additional fees that you may not be aware of.
 
Tarion New Home Warranty Fee
 
This is a one-time fee that you pay on closing for the warranty on your home. It is based on purchase price and based on the average home price these days; it could run you about $1,300. The Tarion fee is never included in the purchase price you see on the price list.
 
Survey Fees
 
Builders will sometimes pass on the cost of the individual lot surveys to the buyer. Make sure to ask if it’s included or not!
 
Landscaping Costs
 
This can vary depending on the builder. Some builders will have a small landscaping package as part of their construction of the community and cost can sometimes range between $500-$1000.  Depending on the municipality you are in, there may also be a fee for planting boulevard trees.  Keep in mind that only some builders will attempt to pass this fee onto the buyer and you can always use it as a negotiating tool.
 
Driveway Paving
 
Driveway Paving is a closing cost that can vary depending on the lot.  Some builders don’t even put asphalt down and leave you with crushed gravel.  The most common choice for builders is to include the first coat of asphalt for your driveway and leave it to you to pay for the final coat (which typically happens a year after the first coat).  This price can vary greatly but to give you an idea, my double driveway cost $800.
 
Canada Post Set-Up
 
Canada Post charges a set up free for each address and the mailboxes. It is usually about $200 per address.
 
Now, imagine all these costs (and more) piled on top of your legal fees, land transfer taxes and CMHC fees (if applicable) and not to mention the fact that you haven’t even bought appliances yet!
 
If you are still in love with the idea of buying a new home, go for it! Choosing your interior finishes is a lot of fun and makes it truly feel like it’s yours when you move in.  Just don’t forget to ask about all the hidden costs so surprises don’t sour your closing day.
 
Alternatively, do you still want a new home without all the costs? Consider purchasing a resale home in a newly built neighbourhood.  You could have everything you are looking for in a new home such as modern kitchens and washrooms without having to pay all these fees.  Yes, it can be done and is done all the time!  Reach out to us for more information if interested.
 
My goal as your realtor and Knowledge Broker is to cultivate an open source of information between us. Knowledge is power and creates experts and understanding. Do you want the power? Connect with me here on my website or on social media at “@knowledgebrkr”.
 
My knowledge becomes your asset and my hard work is your vehicle to success.”
 
JOSHUA CAMPBELL (@knowledgebrkr)
Real Estate Broker
Coldwell Banker The Real Estate Centre, Brokerage
www.KnowledgeBroker.ca
249 Avenue Road • Newmarket, ON L3Y 1N8
Phone 289.231.0001
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