Buying a new home is, of course, a business transaction, and as with all business transactions, a contract will be written. For the customer, this is in the form of a Purchase Agreement wherein expectations are outlined regarding every aspect of your new home's purchase as well as the expectations of responsibility between the purchaser and home builder.

This document can be incredibly complicated to some, but our qualified sales consultants are available to guide you through and help you understand everything you are agreeing to within your contract.

Who Writes the Contract? 

Generally speaking, your home builder will have a standard contract already drawn up that can be filled in for your specific purchase. This contract would have been written by the company's lawyer or based off a model contract provided by the provincial Home Builder's Association to cover all required information for the terms of the sale. This document will detail the responsibilities of both parties to ensure there is no miscommunication. You're welcome to have your own lawyer review the contract if you so choose.

What Should the Contract Include? 

Ideally, the Purchase Agreement will entail every possible item that may arise in the construction of your new home. One of these items may be an easement registered on the lot, which is non-negotiable. This may be a fire hydrant, electrical box, or light standard among other items.

And of course, any and all details about the home itself, the construction and delivery of the home, and a disclosure regarding the dissemination of your contact information should be clearly outlined.

Once the Contract Is Signed 

Before signing the Purchase Agreement, read it carefully. Once you have signed the Purchase Agreement, your portion of the contract is immediately binding unless rejected or declined by the builder's main office. A Purchase Agreement must be accepted by the builder's main office before it is mutually binding; once it is signed by the builder it is a legally binding document. Any and all deposits you've committed on the contract must be supplied by the deadlines included in the contract.

A contract is legally binding regardless of any situation that may arise. Cancellation of your contract is possible, but you may be required to forfeit any deposits already received by the builder to cover the costs they have incurred during the build. Contract cancellation is at the discretion of the builder and is not guaranteed.

If the Builder Doesn't Accept the Offer to Purchase 

In some cases, the builder will not accept your offer. The builder has two options once it receives an offer to purchase: 1) accept the offer as is; 2) counter your offer. If your offer is countered, your original offer is no longer binding and you may step away if you choose. If you agree to the counter offer, you may accept and the contract will then be binding. Alternatively, you may re-counter until an agreement has been reached.

Ensure the Contract is Accurate 

There are many places within the Purchase Agreement that errors can be made. Naturally, this document is long and detailed and human error can come into play. There are several items to check to ensure your contract is properly detailed before signing:

1. The spelling of your name and accuracy of your current address and phone number.
2. Address of the new home, including lot/block/plan number.
3. Financials – deposit amounts and payment dates, purchase price, GST and GST rebate amount, and what is included in that price.
4. A clear description of your upgrades (this may be a separate addendum to the contract later on).
5. Conditions to the sale, such as the sale of your current home.
6. Method of payment for the home, including mortgage, cash, and combination thereof.

You're welcome to have your own lawyer review all documents related to the purchase of your new home. Contracts are a binding legal document, and if there are errors or unclear components, you'll want to address them before any potential problems arise.

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