Real Estate

Lot releases for new home builds

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  • Jun 7th, 2021 4:07 pm
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[OP]
Newbie
Aug 13, 2012
8 posts
1 upvote

Lot releases for new home builds

Hey all, I'm looking for some insight into the process of purchasing a new home build...

I recently signed up for one and got one of the first appointments and was really excited but after talking with one of the sales reps I was informed that I can't just pick the lot I want.

I wanted a specific lot and model but it was implied that I don't really have that choice as the builder wants to sell other lots first and if I go on a waitlist there is no guarantee they will call me back.

It's really disappointing since I'm looking for a permanent home and now I don't know if I should even bother... I thought the whole point of signing up and 'first come, first serve' would mean I had more options.

Anyone who has been through this process before is this standard procedure for new builds? And is there anything you suggest I can do to get a lot I want or do I really have no choice?
17 replies
Jr. Member
Jan 16, 2021
177 posts
60 upvotes
The lot you want.. Is it part of this release or is it next release?

If it's part of this release and is available I don't see why you can't pick it unless someone already selected it.
Newbie
May 30, 2012
73 posts
27 upvotes
Scarborough
I booked a lot in Woodhaven Aurora community in Sept. 2020 and when we went to book lots, we were only allowed to book lots from the selected ones in the release. Certain lots on the site were not released at that point, thus we were unable to select the lot we wanted based on the site map on their website. They finally released those lots now (~7-8 months later) with ~500k increase in price because they called it Phase 3.

So it is possible that if they are more desirable lots, the builder will likely release them later in smaller batch with ++markup on the price with more lot premiums. They have been using this strategy more often due to them having no concerns with selling lots.
Member
Feb 5, 2015
379 posts
462 upvotes
Toronto
It's standard operating procedure, they release lots in phases.
Deal Addict
Jun 18, 2020
1003 posts
874 upvotes
Location? Practices would vary locally. At least I'd guess they would.
Deal Addict
Jan 9, 2010
2341 posts
1814 upvotes
Par for the course. Lots are released in phases. Later phases are generally more expensive so it's possible that it's out of your price range even when it's released and you have the opportunity to buy it.
[OP]
Newbie
Aug 13, 2012
8 posts
1 upvote
SargeJ wrote: The lot you want.. Is it part of this release or is it next release?

If it's part of this release and is available I don't see why you can't pick it unless someone already selected it.
It's supposed to be part of this release, no indication of any phases as of yet... Just did the preliminary appointment and next week is the actual sales appointment
[OP]
Newbie
Aug 13, 2012
8 posts
1 upvote
Ravneet wrote: I booked a lot in Woodhaven Aurora community in Sept. 2020 and when we went to book lots, we were only allowed to book lots from the selected ones in the release. Certain lots on the site were not released at that point, thus we were unable to select the lot we wanted based on the site map on their website. They finally released those lots now (~7-8 months later) with ~500k increase in price because they called it Phase 3.

So it is possible that if they are more desirable lots, the builder will likely release them later in smaller batch with ++markup on the price with more lot premiums. They have been using this strategy more often due to them having no concerns with selling lots.
Ah I see, I guess that makes sense from their point of view but I wish they would have actually showed which lots they were planning to sell and which phase...

It's disappointing but never purchased a new home so a learning experience at least
Deal Addict
Jan 15, 2017
4333 posts
3916 upvotes
Ottawa
Depends on the builder. I have seen some builders not only telling you what lot, but what model and even what upgrades are on the home. We are looking for our next home and we pass on all this nonsense. A home is a very large and serious commitment and having the model you want with the features you want and the lot that you want is not asking for too much. Or at least it wasn't asking for too much in 2019. We are waiting until the pandemic is over when we can get what we want.
[OP]
Newbie
Aug 13, 2012
8 posts
1 upvote
skeet50 wrote: Depends on the builder. I have seen some builders not only telling you what lot, but what model and even what upgrades are on the home. We are looking for our next home and we pass on all this nonsense. A home is a very large and serious commitment and having the model you want with the features you want and the lot that you want is not asking for too much. Or at least it wasn't asking for too much in 2019. We are waiting until the pandemic is over when we can get what we want.
Agree 100% if I can't get the option I want then I won't settle...

Appreciate the insight from everyone!
Member
Jul 1, 2008
243 posts
24 upvotes
This varies by builder, but in general you should be flexible and have several lot choices. Builders will often sell prime lots to family & friends first or to VIP Realtors. By the time it opens to the public, you will have a lot less choice so just be prepared.

The best way to get the prime lots is to know a realtor who works with that builder because they might be able to get you what you want. Even then it's not guaranteed though.
Moderator
User avatar
May 27, 2007
15852 posts
3550 upvotes
Toronto
Very typical of builders nowadays with no shortage of buyers. They would often have a staggered release in the same "phase".
For example, 50 lots in the phase, they will release 10-15 lots at the beginning, and will only release more when the initial batch is sold. Also expect gradual price increases as the phase is nearing the end.
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Jr. Member
Feb 10, 2021
190 posts
127 upvotes
GTA
RHF235 wrote: Agree 100% if I can't get the option I want then I won't settle...

Appreciate the insight from everyone!
just be mindful that what you consider to be your preferred/best option... is probably a shared sentiment with many other buyers.. and the builder. Meaning, more than likely the builder will hold out until a latter part of this "phase" to release the lot+ home and quite possibly put a premium on said lot+ home. Its very common in pre-con for this to happen.

Not saying you should go one way or the other but if you're able to get the home you want, in your budge, in what sounds like your preferred community.. maybe some of those sacrifices dont mean as much as you think? Again, im saying this not being completely sure of the difference between what is available and what you're after but if anything of what ive said above resonates with you.. definitely dont just shut it down. Those might be concessions worth making as getting involved in a pre-con release- much less a VIP/private release- is like winning the lottery in some parts of the GTA.

Also, the most detrimental thing you could do is compare this market to 2019 or anything before that for that matter. Multiple other threads explaining what I mean by that but again- to each their own! I wish you nothing but success in your search!
Newbie
May 11, 2021
6 posts
1 upvote
Hi all,

Not sure if this is the right thread to ask my question...but I saw new build in the thread name and landed here.

I am interested in booking a new build detached in Peel or Halton regions (if I can actually book one realistically in this crazy market is a different story lol), so doing some background research.

From what I understand, most builders want you to have a bank pre-approval completed prior to coming into the booking appointment. I have noticed that these builders also have tie ups with certain banks whose mortgage specialists can assist with the pre-approval. So here go my questions...

1) Is there any advantage getting the pre-approval done via the mortgage specialists of the banks tied with the builders vs. my own bank?

2) Or, is it better to avoid both options above and go via a broker?

3) Sorry, if this comes of as a silly question... the bank pre-approval helps me as a buyer to know my limit of purchase, right? Why would the builder care about it? I mean, let's say the bank pre-approves me for $1M max purchase based on my current financial standing, and I purchase a new build for $1M. But let's say if things go sideways from a financial standpoint by closing time (2023/2024), it becomes my problem at closing to come up with the money, not the builders or bank, right? I have to believe the new builds have never depreciated in value, so the builder/bank can always get their money's worth if my deal with them fell through. Am I missing something here?

Will appreciate any insight in this regard. Thanks a bunch!
Deal Addict
Jan 15, 2017
4333 posts
3916 upvotes
Ottawa
goldi3locks wrote: Hi all,

Not sure if this is the right thread to ask my question...but I saw new build in the thread name and landed here.

I am interested in booking a new build detached in Peel or Halton regions (if I can actually book one realistically in this crazy market is a different story lol), so doing some background research.

From what I understand, most builders want you to have a bank pre-approval completed prior to coming into the booking appointment. I have noticed that these builders also have tie ups with certain banks whose mortgage specialists can assist with the pre-approval. So here go my questions...

1) Is there any advantage getting the pre-approval done via the mortgage specialists of the banks tied with the builders vs. my own bank?

2) Or, is it better to avoid both options above and go via a broker?

3) Sorry, if this comes of as a silly question... the bank pre-approval helps me as a buyer to know my limit of purchase, right? Why would the builder care about it? I mean, let's say the bank pre-approves me for $1M max purchase based on my current financial standing, and I purchase a new build for $1M. But let's say if things go sideways from a financial standpoint by closing time (2023/2024), it becomes my problem at closing to come up with the money, not the builders or bank, right? I have to believe the new builds have never depreciated in value, so the builder/bank can always get their money's worth if my deal with them fell through. Am I missing something here?

Will appreciate any insight in this regard. Thanks a bunch!
1. In some cases the banks tied to the builder can offer you a longer validity period for your pre-approval and some builders will want that,

2. A broker generally only provides a pre-approval for 120 days. If the builder wants to the pre-approval effective to the close of the home then you may be stuck with option 1,

3. New builds have depreciated in value. New builds are subject to the overall general market conditions, so no, it isn't a case that the builder will always get its money. It is though your problem if you cannot close. Should this happen, the builder will generally keep your deposit on the home and list it to sell as an early occupancy home. If the builder has to sell it for less than the contract price that you bought it, the builder can pursue legal action against you. This rarely happens though as the deposit on the home generally allows the builder to advertise the home at a discount without actually suffering a loss.
Sr. Member
Jan 20, 2012
929 posts
568 upvotes
Toronto
RHF235 wrote: Hey all, I'm looking for some insight into the process of purchasing a new home build...

I recently signed up for one and got one of the first appointments and was really excited but after talking with one of the sales reps I was informed that I can't just pick the lot I want.

I wanted a specific lot and model but it was implied that I don't really have that choice as the builder wants to sell other lots first and if I go on a waitlist there is no guarantee they will call me back.

It's really disappointing since I'm looking for a permanent home and now I don't know if I should even bother... I thought the whole point of signing up and 'first come, first serve' would mean I had more options.

Anyone who has been through this process before is this standard procedure for new builds? And is there anything you suggest I can do to get a lot I want or do I really have no choice?
I was shopping for a SFH last month and found the lot I like. However, due to popularity of the design of the house I want was chosen by other buyers adjacent to the lot. I wasn't able to get the layout I wanted. (can't build the same layout for 3 houses in a row) I had to stuck with the only layout and design the builder chose for this lot. For a $2+million purchase, that's really hard to accept.
Member
Jun 15, 2015
436 posts
481 upvotes
Thornhill, ON
RHF235 wrote: Hey all, I'm looking for some insight into the process of purchasing a new home build...

I recently signed up for one and got one of the first appointments and was really excited but after talking with one of the sales reps I was informed that I can't just pick the lot I want.

I wanted a specific lot and model but it was implied that I don't really have that choice as the builder wants to sell other lots first and if I go on a waitlist there is no guarantee they will call me back.

It's really disappointing since I'm looking for a permanent home and now I don't know if I should even bother... I thought the whole point of signing up and 'first come, first serve' would mean I had more options.

Anyone who has been through this process before is this standard procedure for new builds? And is there anything you suggest I can do to get a lot I want or do I really have no choice?
That happened to me about 20 years ago. I had no choice of lot and house design. The builder chose which lot to release and which house design to sell, apparently to preserve the "architectural integrity" of the streetscape.
But, having lived in our house for the past 20 years, we now just love it Smiling Face With Sunglasses.
Newbie
May 11, 2021
6 posts
1 upvote
skeet50 wrote: 1. In some cases the banks tied to the builder can offer you a longer validity period for your pre-approval and some builders will want that,

2. A broker generally only provides a pre-approval for 120 days. If the builder wants to the pre-approval effective to the close of the home then you may be stuck with option 1,

3. New builds have depreciated in value. New builds are subject to the overall general market conditions, so no, it isn't a case that the builder will always get its money. It is though your problem if you cannot close. Should this happen, the builder will generally keep your deposit on the home and list it to sell as an early occupancy home. If the builder has to sell it for less than the contract price that you bought it, the builder can pursue legal action against you. This rarely happens though as the deposit on the home generally allows the builder to advertise the home at a discount without actually suffering a loss.
Thanks for responding skeet50! Interesting point about new builds depreciating in value. Although looking at current market conditions and what is anticipated (higher immigration in post-pandemic world further fueling the market), I doubt the new builds will depreciate any time soon. But then again, who knows...need one of those Magic 8-balls! :)

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