Before deciding to invest in a new home, it’s important to be informed and well prepared. A key part of the planning process is figuring out what you want and need, as well as who can help you make decisions along the way.
Decide what you want and need
Before you start looking for a new home, consider making a list of your wants and needs to guide your search.
Community you want to live in
Think about your commute time to work, stores, school, family, as well as local parks, community centres, and other features to narrow down the best areas to search.
Understand the costs
It is helpful to review your expenses, such as mortgage payment, property taxes, maintenance, condo fees, as well as other monthly costs you have, when deciding how much you can afford.
Type of home
Think about the different home options (such as condo, duplex, townhome, single family), how many people will be living there, whether there will be common areas or a yard, and what maintenance will be required.
Building as an option
Consider whether you have the time and resources to build a home, or if you would rather buy something move-in ready.
People to consider contacting
One way to help ensure you are getting good information is to find the right people who know about the buying and building process.
Home sales professional
Home sales professionals such as real estate agents can offer a variety of services at a range of costs.
Home construction expert
A licensed home inspector or other home construction expert can provide an opinion on the condition of a home based on a visual examination.
Your local municipality
Your local municipality (town, city, county) issues permits that allow builders to construct new homes. They also decide how your community will be developed. Safety Codes Officers employed by your municipality inspect homes during construction and note deficiencies for the builders to address. In Alberta, all new homes must be built to code to ensure that safety standards are met.
Financial advisers help people plan investments, savings, pensions, mortgages and insurance products.
Mortgage brokers work with buyers to arrange financing to purchase a home and must be licensed to operate in Alberta.
Research home builders
Knowing more about home builders can help you decide which home to buy or which builder to work with.
Find a licensed builder
Every new home builder in Alberta must be licensed. The builder registry provides information about home builders such as their licence status, warranty provider, and homes built by the builder since 2014. You can use the following information to help you find the right builder.
Confirm they build where you live
Not all builders build where you want to live. For example, some may not build infill in older neighbourhoods, some may not have an agreement to build in a particular subdivision, and others may not build in remote areas or your community.
Consider checking their experience
Reviewing what a builder has built in the past can help you decide what home to buy. You can also check to see if they are a member of an industry organization.
Consider checking client service history
Not all builders offer the same type of client service during and after construction, so it is important to know what a builder will and won’t do for you. You may wish to talk to homeowners living in homes constructed by the builder or look for consumer reviews online.
Building your own home
Instead of using a licensed builder, you can choose to build your own home. If you do, you are then responsible for:
- the quality of the home
- hiring trades people
- obtaining permits and inspections
- supervising the construction site
As an owner-builder you must provide warranty coverage if you sell the home, so that the new buyer is protected against defects.
Protect your investment
Whether you are buying or building, a new home is a large purchase. The following are some products you might want to consider to help protect your investment.
Home warranty insurance
Home warranty insurance covers construction defects in a new home. It is mandatory for new homes sold in Alberta.
Deposit protection insurance
Deposit protection insurance protects your payments made to the builder constructing the home.
Title insurance protects you from problems with the title or certificate of ownership of the land on which the home is built. Problems could include non-compliance to local bylaws and unpaid liens (for example, liens placed by contractors who worked on the home but were not paid).
Home completion insurance
Home completion insurance protects your investment during the time your home is under construction until you take possession of the home.
Mortgage loan insurance is required if you intend to purchase a home with a down payment of less than 20%.
Mortgage life insurance may pay the balance on your mortgage to the lender upon your death.
Mortgage disability and critical illness insurance may make mortgage payments to your lender if you can't work due to a severe injury or illness.
Property insurance provides reimbursement to the owner or renter of a structure and its contents in case there is damage, theft or injury to a person on the property who is not the owner or renter.