Home buying should be an exciting and enjoyable experience but remember it is a legal transaction that involves a series of steps and a number of companies. Keeping a record of the transaction from beginning to end will help to ensure that everything moves along smoothly and nothing falls through the cracks.
Home buying is based on agreements that all need to be documented. As a home buyer, you should have a copy of every document that is part of the transaction such as:
- Your mortgage pre-approval application and the pre-arranged mortgage confirmation certificate from your lender. The certificate should include such details as the maximum amount you can borrow, the interest rate you will be charged, and the length of time the rate is guaranteed for.
- The written contract sets out the agreement between you and your builder. The contract should cover exactly what you are getting, in detail; where and when; and price and payment milestones.
- Fulfillment conditions are conditions that have to be met within a certain time limit before you have a deal such as mortgage financing or the sale of your existing home. Both you and your lawyer should get copies of any documentation related to the fulfillment of the conditions, and a copy should be forwarded immediately to your builder.
- Change orders used when you fine-tune some of the details or finishing touches on your home during the building progress. Change orders are used by builders to keep track of any deviations from the original contract. Talk with your builder before you make any decisions:
- Sometimes even small changes can have a significant impact on cost or scheduling, particularly if construction is already under way. It may mean changing some aspect of the construction for example; a change in floor coverings may mean different sub-flooring.
- Changes can also result in delays. Builders work with a tight construction schedule and subtrades who move from one task to another and one home to another according to a timetable.
- It is crucial that all changes or additions are documented as written change orders and signed by both parties. This eliminates misunderstandings and ensures that everyone knows what has been agreed to.
- Change orders can be considered extras to the contract. Ask your builder to explain the costs and how you are expected to pay for them.
- Professional builders are registered with a new home warranty program and will enroll your home in the program when you have a firm deal. Once your home is built, and you have conducted a pre-delivery inspection, the enrollment of the home will be finalized, and you will receive a certificate from the program.
- The more you know about the final costs of the entire transaction, the better you can budget. Get written, detailed estimates whenever possible. How much will it cost to insure your new home? What are the closing costs, including legal fees, disbursements, land transfer tax and registration costs?
- The deed is your proof of ownership of your new home. The mortgage document spells out the details of your financing arrangements with your lender. You will usually get these and other documents from your lawyer after closing.
It makes good sense to keep track of conversations, meetings and correspondence between you, the builder and everyone else involved in the transaction. Don't ever hesitate to ask questions of your builder, or air any concerns you may have; they have been through the process many times and are ready to offer their assistance and experience.