After deciding on the type of home, budget, location, and other important factors, you may be ready to buy a new home. How many homes are for sale at a given time within your price range may change quite a bit throughout the year, and from year to year.
Know the market
The 2 types of markets that will affect your home buying experience:
- seller’s market – high demand and few homes available
- buyer’s market – low demand and a lot of homes available
Real estate agents and others experienced in purchasing new homes can help you navigate the market and find the home that best meets your needs.
Real estate agents
You must have a licence to act as a real estate agent unless you are selling your own property. There are a few exceptions, such as some lawyers, land agents and those licensed in retail homes sales. Licensed real estate agents must meet educational and other requirements and are regulated by the Real Estate Council of Alberta.
If you decide to work with a real estate agent, they must sign a written service agreement before they start showing you homes. This is a contract where you both agree to an exclusive working arrangement over a period of time. They must also let you know of any potential conflicts of interest, such as if they represent both the seller and the buyer of the home.
Before you buy
Consider taking the following steps before you buy a new home.
Every new home builder 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. 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 can consider asking homeowners living in homes constructed by the builder about their experience with the builder or look for consumer reviews online.
Checking warranty status
Homebuyers should be aware of what warranty coverage their new home has and how many years of coverage are remaining. The property registry enables users to view the status of warranty coverage for a home, the name of the warranty provider, and the commencement date of warranty coverage (when the warranty period started).
Consulting a lawyer
Lawyers may be able to help protect the buyer and seller by:
- confirming the home has warranty
- ensuring the title for the property is free of debts or liens
- looking at a real property report for any potential issues, such as encroachments (building over the property line) and violations of land uses (see Real Estate Council Alberta – Real property reports)
- ensuring that the sale proceeds smoothly and closes on time according to the details in the signed contract
Checking the land title
All homes have a land title associated with that particular property. A brand-new home will need to be registered through the Land Titles Office. When you purchase an existing home, the land title will need to transfer to the buyer’s name.
Mortgage lenders may register a caveat on the title to protect their legal interest in the property. Home buyers may also register a caveat on the title for deposits paid to the builder. Others, such as builders or contractors, may also register their interest in a property if there is money owing to them for work on a home.
Arranging a home inspection
Before closing on your purchase of a home, you may consider inspecting the state of major systems like plumbing, electrical, heating and cooling, as well as exterior components like the roof and the siding. It is not unusual for residential home purchase contracts to include a home inspection as a condition.
Based on the results of the inspection, you may choose to withdraw your offer, adjust the price to cover the repairs needed, or move forward. In Alberta, home inspectors must be licensed and meet educational and other requirements.
Signing a purchase agreement
The purchase agreement sets out the terms of a residential property sale that includes basic information about the buyer and seller and details about the property. The agreement also includes financing terms, such as:
- deposit amount
- purchase price being offered by the buyer
- applicable taxes
A standard contract is used for the purchase of residential properties. You may choose to have a lawyer review this agreement prior to signing.
When you purchase an individual unit in a condominium complex, you also have rights to common property shared with the other unit owners, such as parking, the lobby, elevators and recreational spaces.
Because of the shared common spaces, every condominium corporation has a board of directors to carry out the corporation’s responsibilities and make decisions about the building. The condominium bylaws will provide more detail about the board’s role and responsibilities to the owners.
Many condominium buyers choose to hire someone to review the technical documents associated with the condominium (for example, purchase agreement, condominium plan, bylaws, management agreement, phased development disclosure, home warranty contract).
Condominium units and common property are protected under 2 different new home warranty policies, which might have different protection periods depending on when construction was completed:
- condominium units - date of first occupancy or date of transfer of legal title to first owner (whichever comes first)
- common property - date of first unit occupancy in the building or date of transfer of legal title to first owner in the building (whichever comes first)