Real Estate

New Build, only a thousand down?

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  • Feb 21st, 2019 11:33 pm
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[OP]
Sr. Member
Oct 2, 2017
702 posts
489 upvotes

New Build, only a thousand down?

We looked into a couple of new builds and they all typically require a certain amount of money incoming money during construction (up to 40k typically) but then we found new build we really liked and the builder said only 1000$ down and financing approval and the rest will be taken care of when we buy on completion.

They also claimed to be never late which our financing guy laughed at (they are always late he said). Is there something I'm missing? Most financing will only guarantee it for max 3 months or then you'll have to redo it again. Is there a catch I'm missing?
I'll see you at the top, cause the bottom is too crowded
15 replies
Deal Addict
User avatar
Dec 10, 2008
4696 posts
1150 upvotes
I don't see the issue. You back out, they keep $1000.

They must be confident that if you walk, they'll have someone else lined up.

No real comment on delays or what that even means - days? weeks? months?
Let's hug it out
Deal Guru
Feb 29, 2008
12653 posts
7895 upvotes
Who's the builder? Is it a house, condo? Ontario? $1K sounds very strange to me.
Deal Addict
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Jan 16, 2011
3930 posts
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The NORTH
Tell your finance guy to eat it, not EVERYONE is late. Our home was finished 2 weeks early because my family was living in a hotel at the time waiting for completion (work relocation). Builder did an amazing job and got everything finished up early so we didn't need to stay in a hotel with 2 young children. I'd question if you have the right finance guy if they are throwing around such blanket statements.
Deal Addict
Dec 18, 2006
1947 posts
353 upvotes
Markham
Are you confusing "$1000 deposit on signing" with "$1000 down"?

Typically builders will have a structure such as:

$5000 deposit on signing
10 day cooling off period in which you need to provide pre-approval and remaining cheques with a schedule like -
Balance of 5% deposit due in 30 days (5% of purchase price, less the $5000 deposit provided on signing)
5% due in 90 days
5% due in 180 days
5% due on occupancy

You haven't provided much details for anyone to give a better response unfortunately.

I would highly recommend you get a physical payment structure document as well as price list from this particular builder for confirmation.

If it sounds too good to be true.. it's usually because the details and fine print have been overlooked & misunderstood.

Good luck!
Jay Rana, Sales Representative
YOUR HOME SOLD GUARANTEED, OR I'LL BUY IT!*
CENTURY 21 Titans Realty Inc. Brokerage
@RE4L.ca
*conditions apply
[OP]
Sr. Member
Oct 2, 2017
702 posts
489 upvotes
y2jversion1 wrote: Are you confusing "$1000 deposit on signing" with "$1000 down"?

Typically builders will have a structure such as:

$5000 deposit on signing
10 day cooling off period in which you need to provide pre-approval and remaining cheques with a schedule like -
Balance of 5% deposit due in 30 days (5% of purchase price, less the $5000 deposit provided on signing)
5% due in 90 days
5% due in 180 days
5% due on occupancy

You haven't provided much details for anyone to give a better response unfortunately.

I would highly recommend you get a physical payment structure document as well as price list from this particular builder for confirmation.

If it sounds too good to be true.. it's usually because the details and fine print have been overlooked & misunderstood.

Good luck!
That's what we expected too, but this is the reply we got when we asked about their payment plan. It's a house, value over 400k.
I would be happy to help you guys with some information in regards to the model, and it's actually very easy and straight forward.
Currently we do not have one under construction, as typically we build as per request with our larger models. We do not do winter builds (most clients appreciate this), so we would break ground as soon as we can to begin construction, once we have a firm offer.

When we sign a contract for one of our models to be built on one of our lots, we require $1000 as a down payment, and the rest of the funds come through the lawyers on the day of closing.
I guess I'm a little confused how a firm offer works, when there's no actual building for ~7months
I'll see you at the top, cause the bottom is too crowded
Deal Guru
Feb 29, 2008
12653 posts
7895 upvotes
There is no builder that will enter into an agreement to sell with just $1000 down. Not one. They have no protection at all. Not happening.
Deal Fanatic
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Dec 27, 2009
7080 posts
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Victoria, BC
kr0zet wrote: Tell your finance guy to eat it, not EVERYONE is late. Our home was finished 2 weeks early because my family was living in a hotel at the time waiting for completion (work relocation). Builder did an amazing job and got everything finished up early so we didn't need to stay in a hotel with 2 young children. I'd question if you have the right finance guy if they are throwing around such blanket statements.
Everyone I've known that's bought pre-construction has had delays.
Deal Addict
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Jan 16, 2011
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Chickinvic wrote: Everyone I've known that's bought pre-construction has had delays.
Everyone I know hasn't. Whats your point? Mine is that blanket statements are factually inaccurate. Saying 'Everyone I Know' is a factual statement. Saying 'Everyone is Always late' is not. A professional should NOT use blanket statements and if the person responsible for the financing of you house is not a professional i'd be worried.
Deal Fanatic
User avatar
Dec 27, 2009
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Victoria, BC
kr0zet wrote: Everyone I know hasn't. Whats your point? Mine is that blanket statements are factually inaccurate. Saying 'Everyone I Know' is a factual statement. Saying 'Everyone is Always late' is not. A professional should NOT use blanket statements and if the person responsible for the financing of you house is not a professional i'd be worried.
You seem angry. Settle. My point is that delays are extremely common. And, good for you and EVERYONE you know lol.
Deal Guru
Feb 29, 2008
12653 posts
7895 upvotes
kr0zet wrote: Everyone I know hasn't. Whats your point? Mine is that blanket statements are factually inaccurate. Saying 'Everyone I Know' is a factual statement. Saying 'Everyone is Always late' is not. A professional should NOT use blanket statements and if the person responsible for the financing of you house is not a professional i'd be worried.
He is right. Most builders are late. I don't even know why this is a debate.
Deal Addict
Dec 15, 2009
1335 posts
470 upvotes
Ontario
JayLove06 wrote: He is right. Most builders are late. I don't even know why this is a debate.
Cuz one dude lucked/fluked out with an on time new home delivery?

Ours was to be delivered November 28th. Feb 21st and we are still renting while we wait ..
Deal Addict
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Jan 16, 2011
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The NORTH
JayLove06 wrote: He is right. Most builders are late. I don't even know why this is a debate.
Most is a far cry from all. That's my point, lets not sensationalize the point but screaming All Builders are late.
Deal Guru
Feb 29, 2008
12653 posts
7895 upvotes
kr0zet wrote: Most is a far cry from all. That's my point, lets not sensationalize the point but screaming All Builders are late.
I would say it's very rare. They always set aggressive dates that they can't realistically make. I see it all the time. "Ready in 2020" and not a single shovel in the ground yet. It's a marketing tool. I've never purchased pre-con that was on time. Condos, always late..and some are late by years. Houses, not as late but usually late.
Deal Addict
Jan 28, 2007
2215 posts
1564 upvotes
SW Ontario
We deal with new construction builders all over Onatrio, and various parts of Canada.

Two major factors here come into play:

- where it's being built and the required permits, some municipalities are worse than others.

- who the builder is, some are really well organized and good, most try with good intentions and run a batting average like scorecard, and the rest will always be late including for their own funeral ...

So it's like an equation as to what the final rest will be ... I've seen top notch builders held up simply over a municipality services issue which is completely out of their control.
I'd rather be outdoors camping, kayaking, and mountain biking ...

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