The Homebuyers’ Guide to NEW HOMES
1. Get in Touch with Your Agent. Before you visit your first model home, sit down with your agent and do your homework. You’ll want to be prepared so that you can determine a comfortable price range for your new home. Determine a Comfortable Price Range If you own a home, you’ll first need to know the net proceeds from its sale in order to determine how much cash you’ll have to work with. Don’t simply estimate this but carefully calculate every possible selling cost.
2. Sellers’ Agents Versus Buyers’ Agents. Here’s a good point to remember. The sales agent in the model home represents the builder, not you. They are known as sellers’ agents. As a buyer you can work with a buyers’ agent at no additional cost.
3. A Builder For All Reasons. Like all tradesmen, builders vary in their fields of expertise. For example there are builders who specialize in craftsmanship, others who are known for their innovative use of space, and those who offer below-market financing or customer attention during construction and after move-in. Determine your own specific needs or preferences then shop around for a builder that will best address your requirements.
4. Get the Facts About Your Builder. Before making a final decision, it is wise to check out the reputation and financial strength of the builder. Get “spec sheets” on home features covering everything from floor plans to energy efficiency, including lot availability and delivery of your home.*
5. Check Out the Neighborhood. Find out from local land-use officials what else is planned or could be constructed in the area, especially where vacant land is applicable. Review the rules for the homeowner’s association, or find out if one will be set up. Think of how you will be affected by commuting routes and times.
6. Be Sure the Contract Works in Your Favor! When spelling out the particulars of an agreement with your builder, ensure you protect yourself by having safeguards written into the agreement.
7. Financing — What’s Best for You? Some builders, especially in high-volume communities that place large numbers of loans, can offer special financing packages. However, because “home loan” lending is highly competitive, you have many financing choices other than those being offered by the builder. Shop around for everything, from rates to lender fees. Appraisals, inspections, surveys, attorneys and closing fees can vary as well.
8. Just Because it’s New… Doesn’t Mean it’s Perfect. Yes it’s new and typically it’s built with modern materials that are durable, low maintenance, stronger, quieter, and safer. But because nothing is perfect, even if it’s new, consider hiring a reputable, licensed home inspector. Consider budgeting for items to be modified or added later on.
The Bank of Canada has just announced its first interest rate cut of 2025, reducing its key policy rate by 0.25%, bringing it down from 3.25% to 3.0%. This move is part of the BoC’s ongoing efforts to support the Canadian economy and maintain stability in these dynamic times, providing a foundation for continued growth and opportunity.
However, this initial rate cut may only be the beginning. Bank of Montreal (BMO) has revised its outlook, anticipating six consecutive quarter-point rate cuts over the next several months, which could bring the Bank of Canada's policy rate down to 1.5% by October 2025. This shift is driven by global trade changes between the US and Canada. These anticipated rate cuts could have significant implications for the housing market.
What Does This Rate Cut Mean for You?
For both buyers and sellers, this rate cut signals a continued trend of lower borrowing costs, which could positively shape the housing market and personal finances alike.
Impact on Homebuyers and Mortgage Holders
This interest rate cut is good news for homebuyers and those with variable-rate mortgages. Lower rates make financing more affordable, potentially enabling buyers to increase their borrowing capacity and explore a wider range of housing options.
- Variable-Rate Mortgages: Homeowners with variable-rate mortgages will see a reduction in their monthly payments. For example, a homeowner with a $676,640 mortgage could save around $87 per month, or $1,044 annually.
- Fixed-Rate Mortgages: Fixed mortgage rates may also decrease slightly as bond yields dip. However, due to inflation concerns tied to trade uncertainties, significant drops in fixed rates may be limited for now.
This rate cut brings relief to mortgage holders whose loans are up for renewal and to prospective buyers entering the market, making homeownership more accessible in the near term.
What About Sellers?
Sellers are likely to see a boost in activity this spring, as the lower interest rates could encourage more buyers to enter the market. With financing becoming more affordable, demand is expected to rise, leading to more competitive bidding in many regions.
While it’s important to stay mindful of regional market conditions and broader economic factors, sellers can remain optimistic about the potential for a more active market. The lower interest rates can help create a more favorable environment for both buyers and sellers.
A Look Ahead: The Global Context. While the interest rate cut is a positive for the housing market, there are still some global trade factors that could play a role. The Bank of Canada has noted that global economic uncertainties, such as the potential impact of U.S. tariffs, could influence future projections. However, these factors are being actively monitored, and the Canadian economy remains well-positioned for ongoing stability.
For Canadians, this means that while the immediate outlook for the housing market is strong, the overall environment remains adaptable to changing global circumstances. The flexibility in policy can provide a buffer against potential disruptions, allowing for smoother adjustments in the future.
What to Expect in 2025 and Beyond
In the coming months, more interest rate cuts could be on the horizon. For real estate buyers and sellers, the focus will likely remain on affordability, with lower mortgage rates potentially driving demand. The lower borrowing costs could make homeownership more accessible, while also encouraging sellers to consider listing their properties as market conditions become more favorable.
The Bank of Canada’s decision to reduce interest rates is a clear signal of support for homebuyers, mortgage holders, and the housing market overall. Buyers can expect lower borrowing costs, and sellers may experience more activity as a result. While there may still be some uncertainty around global economic factors, the outlook for the housing market remains optimistic.
It’s an exciting time for real estate! Stay informed and stay ahead by following Julia, your go-to resource for navigating what’s next.
