New Construction in Halifax Regional Municipality

Many buyers have asked how new homes are sold in the Halifax area. Unlike some areas almost all new homes and condominiums are listed with Realtors on the MLS system. There are only a few builders that have their own sales staff and even those builders also have MLS Realtors selling their houses. This is the same whether you are buying an existing completed new home or having a house built from scratch. Any MLS Realtor can sell you any builder's houses the same way they can sell you resale homes. So if you are thinking about buying a new home you can use me or any agent to do so. You do not have to deal directly with a builder. Here are a few answers to the most common questions:

1)a) Is there HST ( which stands for Harmonized Sales Tax) on top of the price of the house that I see on the MLS website?
---There is always 14% HST on new houses but the price that is shown on MLS includes HST.
b) What does the term 'rebates' to builder mean? There is 14% hst on new houses but there is also rebates of about 2.5% from the government. There is also a First Time Homeowner Rebate in NS of 1.5% of the purchase price to a maximum of $1500. All builders price the houses including the HST less the rebates so they get the rebates since they have already included them in their price calculations. Some builders also include the First Home Buyers Rebate but some don't so it is possible that if you qualify you will receive that rebate.
c) To qualify as a First Time Home Buyer, the individual and their spouse or common-law partner must not have owned and occupied a home in Canada within the preceding five years. For builder-built homes, the five-year period will be determined from the date of ownership or possession, whichever is earlier, of the new home. For owner-built homes, the five-year period will be determined from the date of substantial completion of the new home.
2) What are these allowances I see for flooring, light fixtures, landscaping and others and how does this work?
---On new houses the buyer will have the opportunity to purchase flooring, lights etc. wherever they choose. The builder may have suppliers that they like to use but often they do not so the buyer just goes to the dealer of their choice for these items.
The way it would work is the builder will allow say $8000 for flooring. This includes the cost of installation and all taxes. You go to the dealer of your choice and pick the flooring you want. The builder will pay the allowance amount of $5000 to the dealer and any extra costs are your responsibility. The allowances are seldom enough to cover the actual cost and you should allow at least 5% of the cost of the house for overages on the allowances.
3) What is a furnace lease and what does it mean the buyer to assume this furnace lease?
---The builder will have an oil furnace installed on the property but it will be a lease to own arrangement with the supplier. You will be asked to assume this lease. The lease runs for either 5 or 10 years, with 5 years the most common, after which time you would own the furnace outright. The cost of the lease depends on how much equipment the builder has leased. The builder could have leased just the furnace but often they lease the oil tank, the installation and other items. A reasonable lease to be asked to assume would be less than $90 a month for a term of 5 years. I have personally seen $250 a month leases for 10 years so you must inquire to the amount of the lease before you finalize your sale. You usually have the option to just pay for the furnace outright. Many buyers do this and add the cost to your mortgage. This usually results in substantial savings. The cost varies but typically will range from $3500 to $5000. If you choose to this you must include this in your agreement of purchase and sale.
4 )Is landscaping usually included in the price?
---In serviced municipal areas that have smaller lots and municipal water and sewer the builders will typically landscape much of the property with nursery sod. Some will seed but not many. The average landscaping that would be included would be front and sides to the lot lines and 20 or 30 ft in the back. Any additional landscaping would be your responsibility.On large country style lots the builders are beginning to offer no landscaping at all in the price and those that do it is usually 20 or 30 ft all around the house. On a 1 or 2 acre lot this leaves an enormous amount of landscaping to do. I have been told by some homeowners that they have paid over $20,000 to complete the landscaping on these larger lots.
5 )Is a paved driveway usually included?
--No . Typically a builder will include a crushed gravel driveway only. Paving would be extra. On a smaller city lot this cost would be $1000-$4000 usually. Some builders do include a paved driveway so you have to check.
6) Can I buy my own lot and hire my own contractors?
--- Yes and no. Most lots in subdivisions are owned by builders so if you want to build a house on that lot you must use that builder. There are some subdivisions that you can buy a lot and build your own house. In this area that is probably not the best or cheapest way to go. Builders who build a number of houses in a year can get much lower prices on every single part of a new house. This will be much lower than a person building only one home will get. The end result is that the profit you pay a builder is probably the same as the extra cost to construct the house that you will have to pay. Most buyers here just use a builder.They find it just as cheap and less hassle.
7) a)How long does it typically take to build a new home from scratch.
--- Most builders would say 4 months but it really depends on the time of year and how busy that builder is. I would count on at least 4 months.
b) What happens if the builder agrees to a closing date and the house is not ready? Builder's here will typically not agree to any penalties if they are late. There may be some legal recourse but generally you are at the builder's mercy if they are late and you have to make other living arrangements or store your furniture. You should seek out a builder who is known for closing on time.
8) Are there any warranties on new houses?
---Yes. Almost all new houses sold here have a 7 year new home warranty. The first year covers everything and the last 6 covers major structural defects. Almost all builders have these warranties but some do not. Only qualified builders can offer this warranty. Be careful of builders who offer personal warranties or no warranty at all.
9) If I want to build a new home from scratch or buy an existing new home can you help me.
---Yes. I have sold many new homes in my career and can help you with yours.