Many buyers in hot housing markets across Canada choose to purchase new build houses and condos and with several of them encountering issues after contracts are signed, brokers have figured out keys to advising these clients.
“What I’ve discovered that works is to get the clients a mortgage based on the contracted price but to also advise them to open a line of credit to take care of any surprising additional costs,” Anthony Ambrosio of CSI Mortgages told MortgageBrokerNews.ca. “100 per cent the thing you should do when buying a new property of a builder is to see a lawyer even before seeing a broker.”
The additional costs that sometimes surprise clients include levies, boulevard charges and little hidden costs within the contract, according to Ambrosio.
According to Canada Housing and Mortgage Corporation’s (CMHC) most recent data, there have been 64,199 new housing starts in 2014 and with many undoubtedly being sold before ground is broken, brokers are dealing with many new build buyers.
Angelo Lograno, a mortgage broker with Premier Mortgage Centre has dealt with his fair share of these clients and these cases present unique challenges.
“I’ve run into a lot of new builds and sometimes they can be frustrating to deal with,” Lograno said. “In a couple cases where there’s not enough lead time and promises about upgrades and parking spaces did not come to fruition.”
He agrees with Ambrosio that clients are best served to speak with a lawyer prior to signing but he also advises an ongoing strategy to ensure expectations are met when it’s time to move in.
“I advise clients to build a good relationship with the builder so if any issues arise there is a better chance they can be rectified,” Lograno said. “If this relationship isn’t built the client is just another number in the queue as far as the builder is concerned.”