New Construction Buying Guide Halifax Regional Municipality
Many buyers have asked how new homes are sold in the Halifax area. Unlike some areas, almost all new homes and condominiums are listed with REALTORS® on the MLS system. There are only a few builders that have their own sales staff and even those builders have REALTORS® selling their properties. This is the same whether you are buying an existing completed new home or having a house built from scratch. Any REALTOR® can sell you any builder's houses the same way they can sell you resale homes. So if you are thinking about buying a new home you can use us or any agent to do so. You do not have to deal directly with a builder. Here are a few answers to the most common questions:
Question: Are prices negotiable at all on new homes?
Answer: Usually not. The price is usually the price. Builders are reluctant to sell homes for less than asking because it affects other similar homes they either have built or or going to build in the future. Sometimes, but not all the time, a builder will agree to an extra at no charge such as paving a driveway or finishing a room. However in most cases there is no negotiation and all extras are charged on top of the asking price.
Question: Is there HST (which stands for Harmonized Sales Tax which has varied between 13 and 15% in Nova Scotia. Currently it is 15%) on top of the price of the house that I see on the MLS website?
Answer: There is always HST on new houses but the price that is shown on MLS includes HST so there is no additional cost.
Question: What does the term 'rebates' to builder mean?
Answer: There is HST on new houses but there are also HST rebates paid from the government. Almost all builders in HRM price their properties including the HST less the rebates so the builder gets the rebates since they have already included them in their price calculations.
Question: What are these allowances I see for flooring, light fixtures,cabinets, landscaping and others and how do they work?
Answer: On new houses the buyer will sometimes have the opportunity to purchase flooring, lights,cabinets etc. wherever they choose. The builder may have suppliers that they like to use but often they do not so the buyer just goes to the dealer of their choice for these items.
The way it would work is the builder will allow say $10,000 for flooring. This includes the cost of installation and all taxes. You go to the dealer of your choice and pick the flooring you want. The builder will pay the allowance amount of $10000 to the dealer and any extra costs are your responsibility. The allowances are seldom enough to cover the actual cost and you should allow at least 20% of the cost of the house for overages on the allowances. Many builders are getting away from allowances. They will have samples of the quality included and give you the opportunity to upgrade at an additional cost.
Question: What is a furnace lease and what does it mean the buyer to assume this furnace/heat pump lease?
Answer: The builder may have an oil furnace or heat pump installed on the property but it will be a lease to own arrangement with the supplier. This was very common for several years but not anymore. However you may be asked to assume this lease or a portion of it. The lease usually runs for either 5 or 10 years, with 5 years the most common, after which time you would own the furnace/heat pump outright. The cost of the lease depends on how much equipment the builder has leased.
Question: Is landscaping usually included in the price?
Answer: In serviced municipal areas that have smaller lots and municipal water and sewer the builders will typically landscape much of the property with nursery sod. The average landscaping that would usually be included would be front and sides to the lot lines and 20 or 30 ft in the back. Any additional landscaping would be your responsibility. On large country style lots most builders usually don't include any landscaping at all in the price and builders that do it usually complete 20 or 30 ft all around the house. On a 1 or 2 acre lot this leaves an enormous amount of landscaping to do. I have been told by some homeowners that they have paid over $20,000 to $30,000 to complete the landscaping on these larger lots. However the builder will often do rough grading which reduces the cost of the landscaping.
Question: Is a paved driveway usually included?
Answer: Not usually but it could be. Typically a builder will include a crushed gravel driveway only. Paving would be extra. Some builders do include a paved driveway so you have to check.
Question: Are items such as appliances usually part of the sale price?
Answer: Sometimes but not usually. If they are not included a builder will often have arrangements with a supplier for you to buy at a discounted price. Installation of dishwasher etc. is sometimes included but more often the builder will have a contact for you to hire and pay separately.
Question: Can I buy my own lot and hire my own contractors?
Answer: Yes and no. Most lots in subdivisions are owned by builders so if you want to build a house on that lot you must use that builder. There are some subdivisions that you can buy a lot and build your own house. In the HRM area that is probably not the best or cheapest way to go. Builders who build a number of houses in a year can get much lower prices on every single part of a new house. This will be much lower than a person building only one home will get. The end result is that the profit you pay a builder is probably the same as the extra cost to construct the house that you will have to pay. Most buyers here just use a builder. They find it just as cheap and less hassle.
Question: How long does it typically take to build a new home from scratch.
Answer: Most builders would say 4 -6 months but it really depends on the time of year, how busy that builder is and the availability of product. During the pademic many items such as windows tok several weeks longer than normal for the bulder to order. I would count on at least 4 months.
Question: What happens if the builder agrees to a closing date and the house is not ready?
Answer: Builder's here will typically not agree to any penalties if they are late. There may be some legal recourse but generally you are at the builder's mercy if they are late and you have to make other living arrangements or store your furniture. You should seek out a builder who is known for closing on time.
Question: Are there any warranties on new houses?
Answer: Yes. Almost all new houses sold here have a new home warranty. The first year covers everything and for the remaining years covers major structural defects. Almost all builders have these warranties but some do not. Only qualified builders can offer this warranty. Be careful of builders who offer personal warranties or no warranty at all.
Question: If I want to build a new home from scratch or buy an existing new home can you help me.
Answer: Yes. We have sold many new homes in our careers and can help you with yours. It may be to your advantage to have your own agent who is not also representing the builder. This will ensure you have someone representing only your interests.