March 07, 2017 | Kathleen Renne

Buying from a builder

Buying directly from a builder has many advantages and a few potential drawbacks

Myron Hildebrand is no stranger to working with builders. His current home is proof of that experience, having hired Sunset Homes to execute the build on his semi detached space, which he intends to turn into two investment properties.

"Buying from a builder, you have so much more control over the final product," said Hildebrand. "It's a fun process to go through."

Sunset Homes specializes in city centre residences, building between eight and 12 projects yearly. They say about 50 per cent are for investors like Hildebrand, and the other 50 per cent are for homeowners.

"We can take care of every single need for our clients, right from land acquisition, planning and permitting, so clients can just sit back if they choose," said Sunset Homes' director of business development, Scott Silva, suggesting that level of service is one advantage of buying directly from a builder.

While Sunset Homes hires REALTORS® to conduct market analysis and draw up contracts for buyers like Hildebrand, who are looking for investment properties, Silva says most clients who are planning to occupy their new dwellings work directly with the company.

One concern some buyers have about purchasing directly from a builder is homeowner protection. But in February 2014, the Alberta government helped ease that concern when it mandated builders provide home-warranty coverage for all new homes.

The New Home Buyers Protection Act (NHBPA) stipulates that all new homes must include one-year coverage for labour and materials, two years for heating, plumbing and electrical systems, five years for building-envelope protection and 10 years for structural components.

Buying from a builder, you have so much more control over the final product. It's a fun process to go through.

There are seven organizations in Alberta with which builders can partner to provide these warranties, including the long-standing Alberta New Home Warranty Program (ANHWP).

"The ANHWP has very strict criteria for membership. Our members must have a solid financial foundation, proven track record of successful projects, accountability to customers and industry-specific education," said Fraser de Walle, the ANHWP's director of customer solutions.

Silva says maintaining an upstanding reputation when it comes to providing post-build support for a buyer is crucial for builders like Sunset.

"We're not just building homes, we're building relationships," Silva said.

While Hildebrand's experience of buying from a builder was relatively seamless, the same cannot be said for Cory Gerlitz, who purchased a property from a different builder in 2014.

Both he and the builder used REALTORS® for the transaction, something Gerlitz feels is crucial.

"With a brand-new house, there are a bunch of extra things you should be checking for, things like how flexible the builder will be in helping you out, if all building permits have been closed and signed, and if land titles have been done properly," said Gerlitz.

While Gerlitz was pleased with his new home initially, he and his family soon saw problems.

"We started to notice drywall seams and a spot on the ceiling. We opened up the ceiling and discovered we had a pinhole water leak that had saturated a large section of the drywall," Gerlitz explains.

As per the NHBPA, these defects are under warranty for one year. So Gerlitz reached out to his warranty provider, the ANHWP. He was re-directed to the builder, who, Gerlitz was told, is responsible for fixing any issues homeowners encounter during the first year, as per the builder's agreement with the ANHWP. What ensued was a lot of back-and-forth between Gerlitz and the builder to get the repairs completed.

Over the next 10 months, 80 per cent of the interior was repainted, 30 per cent of the ceiling was replaced and two showers were re-installed.

"After 10 months of undergoing a remodel in our new house, the experience left a bad taste in our mouths," said Gerlitz. Afterwards, he and his family sold the property and bought an older home, whose growing pains were long behind it.

Gerlitz has advice for those wishing to buy from a builder, starting with educating themselves on what constitutes good construction. And, he says, even with a new build, it's important to have a thorough home inspection.

Tagged: Buyer Profile | Calgary Real Estate News | Home Buying | Sunset Homes | YYCRE