Should I buy a new house from the builder?

new house

new houseI get emails all the time, mostly from people who are looking for reasons not to buy a house (it seems). It’s a big decision, I know, one of life’s biggest. But just think of all the times you’ve decided “yes” to life’s big decisions:

“Yes”, to marrying that girl.

“Yes” to taking that job.

“Yes”, to buying that car, canoe or computer.

“Yes”, is the the correct answer. Trust your instincts. Stop reading the newspaper.

The email below is from a guy working with an out of town agent (a friend). That’s a mistake. Real estate is local. I don’t understand the Milton or Mississauga market. I wouldn’t be showing houses there. This guy, SanJay, he contacted me originally because he wanted to buy a house in a good neighbourhood and I have written many blog posts about what I think are good and bad neighbourhoods. As it turns out, the two neighborhoods he had identified were not good and I told him so. They are both new and remote. The houses are slapped up. The school is overcrowded already and they are still building more houses. One of them was near nothing: No shopping, no bus routes, nothing except for a lot of other houses.

I told him he could do better.

Then I get this email:


Hey Keith

Thanks for the insight into the LRT’s effect on Kitchener’s real estate values.

I also have a question, not directly relating to that article. It’s about Tarion Warranty on new homes.

Firstly, my doubt comes from the fact that most new home-owners not necessarily buy ‘everything’ from the builder ex appliances, etc. Now if a home owner buys 3 out of 4 kitchen appliances from the builder, that should technically void the Tarion. So that would mean that almost all the new home-owners are kept under dark by the builders. So if you could possibly explain to me as to what happens on that front, that’d be great.

Secondly, branching off from the same topic, are model homes covered in the Tarion? Because the warranty excludes new homes/properties that are/were being used for any purpose before the actual home owner moved into it.

I would really appreciate your response.




Good Morning Sanjay 

I don’t get involved in new home sales very often (once this year) as I always advise my clients not to buy from the builder. The reasons are many

1) Buying a new home is like buying a new car. The price is inflated. If you try to sell it, in 3 or 4 years (or longer if the builder is still building in the neighbourhood) you will certainly lose money.

2) A real estate lawyer friend of mine says, “the Tarion Warranty was written by builders, for builders”. It is basically a sales tool and unless the whole neighbourhood is underwater, useless for new homeowners.

3) Since 2000, the quality of new home construction has steadily and consistently declined.

4) New neighbourhoods are devoid of trees, community and street parking. Neighbourhoods have personality but they take a decade or two to develop.

You’re crazy to buy a new house. I hope I’m clear on that. Bad investment. Bad lifestyle. 




As you can see, I didn’t really answer Sanjay’s questions. I was kind of hard on him but I think he’s missing the boat. I can understand why he’d want to buy a new house from the builder; in many cultures “new” is seen as good and safe and reliable. But I don’t agree and it’s my responsibility to give him an honest answer.

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