Purchasing a resale house or condo is not the only option available when looking for a new home. There is always the option of purchasing pre construction homes. This option allows homebuyers to move into a brand new “move-in-ready” home with personalized interior design accents. There is also the added bonus of having a home warranty.

However, the process of purchasing a pre construction home is different that a resale home. Below you will find a few thing you must consider when thinking about purchasing a pre construction home.

Jump links:

Research the builder

Is the builder licensed?

Visit project site

Visit the model home

Add everything to the purchase agreement

Research the Builder

First you must find a pre construction home project. You’ll likely want to find a builder who can build new homes in Ontario to look for current or future planned projects.

Once you have located a pre construction home project, it is imperative that you research the builder for the project. It is important to research their reputation and completion rate before deciding to buy one of their homes.

An easy way to do this is to visit one of their completed projects and speak with homeowners. You can also look reviews on the internet for that builder. Keep in mind, every builder will have positive and negative reviews.

You should be looking for trends in reviews and news about their past jobs and make sure that you cover any concerns you may have in the purchase agreement documents. Another great way to learn more about the builder is to ask your real estate agent.

They may have worked with the builder in the past and/or is aware of their reputation.

Is the builder licensed?

An additional resource you can use is the Ontario Builder Directory. On this site you will be able to confirm if your builder is licensed to build new homes in Ontario.

You will also be able to see how many homes they have built, what their claims history is and, in the case of condos, what projects are underway or have been completed.

A new feature that has been added to the directory is Conviction Search, which allows you to see whether a particular company or individual has been associated with any illegal building convictions during the past 10 years. 

Be sure to visit the Project Site if possible

Seems odd, but many people buy new construction homes without actually visiting the site. And in some cases, it makes sense. Maybe the home is in a different city or province. But, much like going to a resale home before buying it, visiting the project site is important if possible. It allows you to get an idea of your potential new neighbourhood might be like. Things like proximity to amenities and neighbours, lot lines, potential easement and driveway sizes.

This could be schools, shopping centers, gyms, finding the Beer Store and more. Be sure to talk to your realtor about where this house and neighbourhood are within the city. There are realtor maps that outline specific geographic boundaries to help you find the best Guelph neighbourhoods

Visit Model Home

During your visit to the model home you must remember that these are usually top of the line homes. What is meant by this is these homes will likely have features that are not part of the standard home. Many of these features will upgrades that come at an additional cost.

Always be sure to ask which features and amenities come standard and which are upgrades. You can ask your Guelph real estate agents to get you a list of standard features. You’ll also get a list of common upgrades and the associated costs.

All builders of pre construction homes will have different features they offer standard, like an attached garage. Or, when it comes to plumbing and electrical.

It is a good idea to see what they offer as standards so you can see what they look like. You can then make decisions about whether or not you will need to pick alternate plumbing and lighting fixtures.

It is important to remember that upgrades in your future home are an investment. However, builders turn a large profit off upgrades so they will push them.

You should try to negotiate the price for any upgrades you wish to add. The more upgrades you add, the more leverage you will have when haggling over the price for your home.

Add Everything to Purchase Agreement

It is important to ensure everything verbally agreed upon is put in writing before signing anything. Like the famous saying: make sure it’s in writing. If unsure, make sure you get it in writing as it’s impossible to enforce if it’s not documented.

Some important questions/topics that must be addressed in the agreement are

  • How the home will be finished?
  • What will happen if there are construction delays?
  • What will happen if the project is cancelled?
  • List of deadlines for any important decisions you will need to make during this process
  • Schedule of the deposit payments that you will be making throughout this process (read: difference between deposit and downpayment)

Cooling Off Period for Pre Construction Homes

The contract should have a mandatory cooling off period written into it. This is a 10 day period in which you can back out of the deal and receive a full refund.

This time should be used to have a lawyer experienced in pre construction home purchases review the purchase agreement. It can also be used to secure a loan if you have not already done so.

What about a mortgage? You’ll need to decide what type of mortgage you’ll need or want and to talk to mortgage broker about variable vs fixed rates. In many cases, getting the best mortgage rate is important- but it’s not everything. As well, you need to ensure that your lender will actually give you the funding you require.

Customize Your Home

During the construction of your home, you will be in contact with from the builder’s office to customize your home. You will be working with them to pick the colours, finishes, and upgrades you want in your home and create your dream home.

Pre-delivery Home Inspection

There is a mandatory inspection you must do with the builder before delivery of the house to you. This must occur for all new homes under warranty.

This inspection is for you to ensure the builder lives up to the promises set out in the purchase agreement. If are any deficiencies, write them down and have the builder sign off on the list. They will then need to fix the listed issues.

This inspection, often referred to a pre-delivery inspection (or, PDI) is not the same as a traditional home inspection.

It is important to remember there are different deadlines for warranty claims. It is a good idea to mark these deadlines on your calendar.

Interim and Final Occupancy

There are two important dates during the closing process of pre construction homes. These stages are interim occupancy stage and final closing stage.

You will first meet with your lawyer during the interim occupancy stage. You must be ready to make any outstanding deposits and occupancy fee payments. It is important to note that during the Interim Occupancy period you still do not own your house. Your mortgage or final payments will not occur until the Final Registration date.

You will be meeting with your lawyer a second time during this process shortly after the final closing date. Then, you can sign all of the documents to officially transfer ownership of your house from your builder/developer to you.

Your mortgage will be beginning and your lawyer will be explaining all of the outstanding costs you will be responsible for paying to finalize this purchase. You now officially own your house!

Things to Keep in Mind

Firstly, GST/HST is different with pre construction homes than it is with resale homes. Resale homes purchase price includes GST/HST where pre construction homes do not. This has the potential to significantly increase the overall cost of your home. However, there are rebates you may be eligible for.

Secondly, you need to consider the fact that your home might not be ready for years after signing the paperwork. There are almost always delays with construction so you need to be patient and flexible given that it is more than likely that the construction of your home will be delayed.

Is this pre-construction home your first home? There are some other first time buyer tips and considerations you should account for when buying a house.


Purchasing a pre construction home is not as complicated as it seems. However, you will want the right real estate agent working for you. They’ll do ample research to find the perfect house or condo for you and your family.

If you have any questions about buying pre construction homes, Beth and Ryan are Guelph realtors who are always happy to help.

Related post: 16 things to consider when you’re buying an older home. This post is part of series about things to consider when buying an older home. One alternative is just to buy pre-construction!