Planning a New Home/FAQs
Financial & Legal Information
PURCHASE AGREEMENT OR BUILDING CONTRACT
The purchase agreement or building contract is an agreement, which sets out the mutual obligations
between the purchaser and the builder. To be valid, any verbal understandings or agreements that lead
up to the contract signing should be documented in the contract. Unless they appear in writing,
verbal agreements are not part of the contract. As the Purchaser, you're obligated to pay for and take
possession of the home you have contracted for upon its completion. The Builder is obligated to construct
the home according to your contractual specifications and to complete the transfer of title. The Purchase
Price is the agreed upon price of your new home (and lot if applicable) plus GST less the GST Rebate
granted by the federal government to new home buyers plus any adjustments. The Purchase Price also
includes any agreed to changes in the plans and specifications at the time of the contract signing.
Adjustments to the Purchase Price are normal added costs associated with the purchase of a new home.
These can include: Legal Fees, Title Transfer Costs, Mortgage Application Fees, Interest Costs during
construction and at Interest Adjustment Dates, and Taxes and supplemental taxes. Builders have their own
policies on how Adjustments are handled.
- Read any pre-printed standard clauses
- Know and stipulate what the builder is to supply and install
- Determine exactly what the purchase price includes
- Do not sign in haste
- Ensure you fully understand all aspects of the contract
- Ensure the contract accurately reflects your wishes
- Have your lawyer review the wording and your obligations
Your Mortgage Lender will provide you with a letter of commitment regarding your mortgage
arrangements. This details the specifics of your loan, interest rate adjustments, and adjustment dates.
There are many different ways to approach your mortgage arrangements.
This will depend on your personal financial situation and your ability to find the best terms
available at the time. One of the most common and beneficial features is a "capped
rate". This generally guarantees that your mortgage rate will not go up even if interest
rates have generally increased at the time of closing, but will go down if they have decreased.
An experienced mortgage officer should be capable of answering any mortgage questions that you might have.