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Buying a new construction home from a seller who is NOT a builder-what you need to know.

Posted by buildsbythebay on June 15, 2020

Buying a new construction home from a seller who is NOT a builder-what you need to know.

It is a common myth to think if you have a new build home you will automatically have a Tarion warranty. If you are buying from a Tarion registered builder, you will get a Tarion warranty. What happens in the case that the seller is not a builder? How can you be ensured of the build quality? Read more here if you are considering buying a new construction home from a seller who is NOT a builder.

If you are buying a new construction or a “new build” home from the owner they do not need to register with Tarion if they built it for themselves. With covid19 some new homes are coming to the market. Sadly, some homeowners have found themselves in a position where they cannot afford to live in the home they built for themselves. They are not builders, therefor not required to be registered under Tarion. Acting as their own general contractor, they hired local trades and purchased building materials.

Having a good lawyer, and home inspectors are good first steps. Getting copies of all permits and warranties, and asking for a hold back can ensure you are well protected.

By making sure you get copies of all the building permits as they are passed and signed off by the town inspectors, you can see from the outset how the build has progressed. A city inspector will pass or fail or pass with conditions on; footings, foundation, plumbing, framing, insulation and electrical work. The last and most important inspection is the one giving you the occupancy permit.

Another great way to protect yourself is to get any transferable workmanship, installation or product warranties from the homeowner. Items like windows and doors, appliances, siding, roofing, flooring and so on. Any good trade or manufacturing company will stand behind the product they sell and install.

Hold backs are an excellent way to ensure if any major structural defect comes up within the hold back period, that money is set aside for repairs and remediation. Ask for a percentage of the sale or a fixed dollar amount. Make sure it is held in trust for a specified term. There should be clear conditions of when and how money is to be disbursed and timeline for releasing funds.

Specializing in new build construction homes for the past 5 years, I have seen custom homes, tract built homes and homes built by owners. Often the home built by the seller for their personal use shows great care and attention. This was after all to be their home. Don’t be afraid to look into these types of new construction homes just make sure you do your due diligence. As always you know how to find me: contact us here, Call/text 705-539-0241 or email!

*UPDATE as of March 20 2024 Home Buyers can now Register their Purchase Agreement with Tarion. 

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