What You Should Know Before Buying A New Home From A Builder
Buying a newly built home in Ottawa can be exciting. New construction offers modern layouts, energy efficiency, and the appeal of a fresh start. But purchasing from a builder is very different from buying a resale home, and in Ottawa’s market, the details matter.
Before signing a builder’s purchase agreement, here’s what Ottawa buyers should understand to protect themselves financially and legally.
1. Builder Contracts in Ottawa Are Not Standard Real Estate Agreements
In Ottawa and across Ontario, builder agreements are builder-drafted contracts, not standard MLS® purchase agreements. These documents are written to protect the builder, often limiting buyer flexibility and remedies.
Key differences include:
Limited or no buyer conditions
Builder-controlled timelines
Broad rights to delay or modify construction
Strict notice requirements and default penalties
Do not assume the contract works the same way as a resale offer - it doesn’t.
2. Closing Dates Are Estimates, Not Guarantees
Ottawa builders typically provide an anticipated or tentative closing date, not a firm one.
Buyers should understand:
Builders can extend closing dates multiple times
Delays may be caused by labour shortages, materials, inspections, or city approvals
Your mortgage, rate hold, rental plans, or home sale timing may be affected
Flexibility is essential - but you need to know how much flexibility the contract requires.
3. Deposits Are Larger and Structured Differently
New-build deposits in Ottawa are often:
Paid in multiple stages
Required quickly after signing
Non-negotiable
Subject to specific forfeiture conditions
Before committing, confirm:
Total deposit amount
Payment schedule
Refund rights (if any)
What happens if financing falls through or closing is delayed
4. The “Starting From” Price Is Rarely the Final Price
Ottawa buyers are often surprised by how much the final price increases beyond the advertised base price.
Additional costs may include:
Lot premiums
Upgrades and finishes
Development and education levies
Utility connection fees
Tarion enrollment fees
Closing adjustments
Always request a full cost estimate, not just the base price sheet.
5. Plans, Finishes, and Specifications Can Change
Builder agreements in Ontario usually allow substitutions or changes to:
Layouts
Materials
Fixtures and finishes
Mechanical systems
While builders aim to deliver what’s shown, contracts often permit “equivalent” substitutions. Understand what protections you have if changes occur.
6. Independent Legal Review Is Essential in Ontario
Ontario builder contracts are complex. A real estate lawyer should review:
Delay and termination clauses
Deposit protections
Assignment rights
Warranty limitations
Default consequences
Legal review before signing is critical - not optional.
7. Financing a New Build in Ottawa Requires Extra Planning
Because timelines can shift:
Mortgage rate holds may expire
Lenders may require re-approval
Appraisals typically occur closer to completion
Ottawa buyers should plan for:
Interest rate changes
Longer financing timelines
Possible re-qualification
Working with a lender familiar with Ottawa new-construction purchases reduces risk.
8. Understand Tarion Warranty Coverage - and Its Limits
Most new homes in Ottawa fall under Ontario’s Tarion warranty program, but coverage is not unlimited.
Buyers should understand:
What is covered vs. excluded
Strict reporting deadlines
Maintenance responsibilities
Dispute resolution processes
Warranty protection is valuable - but only if you follow the rules precisely.
9. Know Exactly What Your Current Home Can Sell for Before You Sign
This is one of the most overlooked - and most critical - steps for Ottawa buyers.
If you are buying a new build while owning a current home, you should know:
What your home would realistically sell for today
How long it would likely take to sell in your specific neighbourhood
Whether pricing pressure, competition, or market shifts could affect your timing
Ottawa’s market can vary significantly by neighbourhood, property type, and price range. Overestimating your home’s value - or assuming last year’s prices still apply - can put you at serious financial risk.
Before committing to a builder:
Get a current market valuation, not an online estimate
Review recent comparable sales in your neighbourhood
Understand realistic timelines and pricing strategy
Confirm that your equity aligns with deposit and closing requirements
Knowing your true selling position protects you from being locked into a purchase you can’t comfortably complete.
10. Representation Matters - Even With Builders
Many Ottawa buyers assume they don’t need a REALTOR® when buying directly from a builder. In reality, professional representation helps:
Explain contract risks before signing
Flag red-flag clauses
Coordinate legal and financing timelines
Ensure your resale strategy aligns with your purchase
In most cases, the builder pays for buyer representation, not you.
Final Thoughts
Buying a new home from a builder in Ottawa can be a great opportunity - but only if you go in fully informed. Builder contracts, timelines, pricing, and resale risks are very different from traditional purchases.
Before signing:
Review the contract carefully
Get independent legal advice
Understand all costs and timelines
Know exactly what your current home is worth in today’s Ottawa market
Preparation upfront can save you from stress, delays, and costly surprises later.
Buying A New Home From A Builder FAQ
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No. Most Ottawa builders provide tentative or anticipated closing dates, not firm ones. Contracts usually allow the builder to extend closing dates due to construction delays, permitting, inspections, or supply issues.
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Deposits vary by builder and price point but are often paid in stages and can total tens of thousands of dollars. Deposits are usually non-negotiable and subject to strict terms if you fail to close.
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Beyond the base price, buyers may encounter:
Lot premiums
Upgrade and design centre costs
Development and education charges
Utility connection fees
Tarion enrollment fees
Closing adjustments
Always request a full written cost breakdown before signing.
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Most new homes are covered under Ontario’s Tarion warranty program, but coverage is not unlimited. Buyers must meet strict reporting deadlines and follow maintenance requirements for warranty protection to apply.
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You can—but this is risky if you don’t know your home’s true market value first. Ottawa’s market varies significantly by neighbourhood and price range. Overestimating your resale value can put your new-build purchase at risk if the market shifts.
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Some Ottawa builder contracts allow assignments, but many restrict or prohibit them, or require builder approval and fees. Assignment rights should be reviewed by a lawyer before signing.
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Sometimes, but not always. Incentives may include upgrades, décor credits, or closing cost incentives rather than price reductions. Negotiation strength depends on market conditions, inventory, and project stage.
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Before signing. Builder contracts are not standard and heavily favor the builder. Legal review before you commit is essential to understand your rights, risks, and obligations.