Real Estate

Canmore New Developments & Construction – Tips for Buyers

lookout ridge canmore new development construction at stewart creek three sisters

Canmore New Developments & Construction – Tips for Buyers

Looking for new developments & construction in Canmore? There’s something to be said for the process of selecting finishes, watching a building go up, and being the first occupant of a brand new property. Which as the owner of a nearly 20 year old home here in Canmore, I can definitely appreciate! (Warranty?! Yes please!)

Sifting through dead websites and questionable links can make it hard to find solid information on new construction here in the Bow Valley. Maybe you’re looking for a nightly rental investment property, new retirement condo, or a forever home in Canmore. Working with a trusted, local real estate advisor can help you to avoid pitfalls and find the best property for you.

In this article, we will explore:

  • Who is working for who?
  • Why you should have your own representative
  • “Dual representation” and new Construction
  • Negatives & Positives pre-sales & new construction
  • How to find the best new developments & construction in Canmore

Who is Working for Who?

Maybe you’ve found a sales website online, or visited a sales centre or open house recently. Well done! These are all great ways to get initial information on new developments.

Something you should know: the person giving you information on the development, no matter how friendly, is viewing you as a customer. Their client is the builder. Here’s the difference between these two terms in the context of real estate agent relationships:

An agent’s responsibility to their client:

  • Undivided loyalty (important!), confidentiality, full disclosure of anything that might influence your decisions (ie. conflict of interest), obedience, reasonable care & skill, and full accounting of documents & funds.

An agent’s responsibility to a customer:

  • Can help complete standard forms, give statistics, or recommend contacts. Must act honestly, use reasonable care & skill, and ensure any information they give is correct. They may provide you with a “builder’s contract”, which is not a standard Alberta Real Estate Association form.

While the builder representative might make it easy for customers to complete forms and provide info, their loyalty is solely with the builder. They must act only in the builder’s best interests. This means selling their properties for the highest price, in the shortest amount of time.

Why you should have your own representative

When you have your own representative, you are a client, not just a “customer”. As a consumer, you are entitled to have your own representation in the purchase of a property.

This means you have someone with undivided loyalty to you, with a fiduciary responsibility to act in your best interests. They can ensure no important contract & warranty details are glazed over, no issues are missed, and your needs are considered every step of the way.

Oh – and nearly 100% of the time (at least with me), it costs you nothing to have your own agent working for you. This is because the builder has already agreed to pay any commissions.

“Dual Representation” and New Construction

Sometimes, an agent or brokerage can represent both the seller & the buyer in a transaction, if everyone agrees. This can happen often at open houses and with large brokerages with lots of agents working together. This can lead to cost savings for the builder in some cases.

In this case, the agent/brokerage who has been working with the builder to market their properties, becomes “neutral” for this one specific transaction. Note, though they will still wholly represent the builder for all other units in the development.

In this case, you will be asked to sign an “Agreement to represent both Seller and Buyer”. It’s up to you as a consumer to decide if this is something you’re comfortable with.

It’s important to note that with common law real estate brokerage, even if you don’t work with the specific agent whose “name is on the sign” of the development, the developer/builder has hired the entire brokerage, and thus all agents technically represent the builder first, until a dual representation agreement is signed.

Some concerns with pre-sales

Many developments will start with a “pre-sale” or “pre-launch”. This can be an exciting time to get in on the “ground floor” of a property! (or get a penthouse ideally…)

Usually, builder representatives will ask for a refundable deposit, which gives you the potential option to sign a purchase contract on the sales launch day. On this day, they will go down the list of reservations, giving each party a small amount of time to review and sign a purchase contract on the spot with a 10% deposit.

Some issues that can come up with this process are:

  • They will take several hundred reservations for often less than a hundred units.
  • The sellers may allow reservation holders who have more than one reservation (i.e. an investor buying 2-15 units) to skip ahead of any and all single reservation holders, regardless of when they reserved.
  • The best units will be taken first by previous clients of & investors known to the seller.
  • Often when your turn finally comes up, all of the units have been sold, or there are only undesirable / high budget units remaining.
  • They release little information about the development until the launch day, when they have hundreds of buyers lined up for a handful of units.

All of these things together can be daunting, but don’t fret. There’s a chance to get a unit – and sometimes not every unit will sell on the launch day. The main thing to note here though, is that the process is highly weighted to the benefit of the builder/developer.

Some Positives & Negatives with pre-sales and new developments

First and foremost – you get a brand new property that no one has lived in! Usually the first 10-20 years in the lifespan of a property come with the fewest issues as well, which is a huge plus. Some other key benefits are:

  • Usually new construction comes with an Alberta New Home Warranty, guaranteeing different levels of craftsmanship and work. Appliances will have warranties as well.
  • You get to choose the finishings! No need to rip out old chunky river rock, or paint those burgundy walls white…
  • You don’t need to pay now. The majority of the funds are due on possession – likely years in the future. It’s important to make sure you have the funds though, before signing off on anything.
  • Lock in a price now. The market can go up and down from year to year, and often increases will be priced in, you at least can feel secure in the price you agree on today.
  • New builds are less likely to have condo issues, since the board will only just be formed.

Negatives to consider:

  • Most contracts can’t be assigned.
  • There can be long construction delays and moving dates, and you are locked in.
  • Lots of units of the same type coming online at once (ie. 100 Airbnb’s simultaneously).
  • If its a revenue property, you earn no revenue while it’s being built (vs. one already built).
  • Potential for issues with builders, contractors, etc.

How to find the best new developments & construction in Canmore

Working with an agent who knows the ins & outs of builder contracts and new developments in Canmore is the best way to get the inside track on anything coming to market. Having someone in your corner is the best way to get what you want out of this important purchase.

There is only so much of Canmore left to develop – so new construction is tight! I’m always here to help if you have any questions on pre-sales, builder contracts, finding developments and more. Let’s connect!

Feel free to call, text, or email Dan today for no-pressure advice,
tips and insights into the Canmore & Banff real estate market.

LET’S CONNECT