Buying a new home? Tips to get started
(NC) You may not realize it, but buying a new home requires learning a new language. As you read through sales brochures, real estate listings or contracts, you may come across terms that are unfamiliar but very important to know.
Below are some basic terms and definitions you may encounter in your search for a newly built home. With these terms in your vocabulary, you¡¯ll be better prepared to talk to your builder, real estate lawyer and property manager.
What kind of home are you buying? There are different categories based on the type of ownership.
- Freehold home. This means you are buying both a home and the land it¡¯s on. A single-family detached home, a semi-detached home, a unit in a row house or a unit in a duplex can fit into this category.
- Contract home. When you already own land and you hire a builder to construct a new home on your property, this is referred to as a contract home.
- Condominium. This type of real estate is divided into several units that are each separately owned, surrounded by common areas that are jointly owned like pools, lobbies or workout rooms. These common areas are referred to as ¡°common elements.¡±
What are you signing?
- Agreement of Purchase and Sale. This is a written contract between a vendor and a purchaser for the purchase of a home. The APS contains the particulars of what is included in the price.
- This forms part of the APS of every new home. It sets out a number of rights and obligations for both vendors and purchasers regarding delays in closing or occupancy, termination of the APS, and critical dates.
- Pre-delivery inspection. This is an inspection a builder is required to do with purchasers before they take possession of a new home. It¡¯s an opportunity to walk through with your builder to review all the features and functions of your new home. You and your builder will identify any damaged, missing or incomplete items and put them on a PDI Form. The form serves as a record of the condition of the home at the time and also provides a to-do list for repairs for your builder.
- Certificate of Completion and Possession. This is a document provided to you by your builder. It includes your home¡¯s enrollment number for the new home warranty program and the date of possession, which is also the start date of your warranty.
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