One very common question we encounter in real estate is this: “Should I buy a new home from a builder, or a resale home?” The answer to this question depends on the buyer and what they have their heart set on. The important thing is to understand the pros and cons of each choice, and make an educated real estate decision.
Some people really like the idea of buying a new home. The home will be fresh, never lived in and the finishes will likely be modern and stylish. One advantage of buying new is that you can often customize the home to your wants and needs. You also may not have to spend much money on maintenance in the first little while. Given that the home was built properly, things like your furnace, roof, windows etc. should last you quite a while, like a new car!
This of course can save you some hassles in the beginning. In the case that you do run into some issues, many problems are covered by the new home Tarion Warranty which will cover different cosmetic and structural problems for 1 year, 2 year and 7 year periods after you’ve moved in. For more information about what is covered under Tarion, visit: http://www.tarion.com/Warranty-Protection/Warranty-Coverage/Pages/default.aspx.
Some people really like the idea of buying a new home. The home will be fresh, never lived in and the finishes will likely be modern and stylish. One advantage of buying new is that you can often customize the home to your wants and needs. You also may not have to spend much money on maintenance in the first little while. Given that the home was built properly, things like your furnace, roof, windows etc. should last you quite a while, like a new car! This of course can save you some hassles in the beginning. In the case that you do run into some issues, many problems are covered by the new home Tarion Warranty which will cover different cosmetic and structural problems for 1 year, 2 year and 7 year periods after you’ve moved in. For more information about what is covered under Tarion, visit: http://www.tarion.com/Warranty-Protection/Warranty-Coverage/Pages/default.aspx.
When buying new homes, it is important to be aware of some of the out of pocket expenses that come with it. In some cases, upgrades from the builder may need to be partially paid out of pocket and up front, and can be quite expensive! It may not take much for your attractive $320,000 price tag to turn into $365,000. In addition, you may have to purchase new appliances, an air conditioner, window blinds and drapery, new light fixtures, new paint, landscaping, decks/curbs, and put up a fence in your backyard. Closing date delays are common with purchasing new homes as well. A July 1st closing date could easily turn into an October 1st move-in date. The builder will often times have a grace period for delaying the closing date up to a certain time (typically 2-6 months, depending on the builder). Also, depending on where the builder is in the completion of the community, it is likely that you will need a season’s pass at the local car wash as you may be driving in the mud for the foreseeable future. Let’s not forget that new home sales are subject to HST. There are rebates in place to help absorb some of the cost (6% up to $24,000 for homes under $400,000) and this essentially reduces to amount to the previous “PST” tax. For more expensive home, you will be subject to full 13% HST on the amount over and above 400k, as well as the $28,000 for the first 400k.
Resale homes have their pros and cons as well. Depending on what you buy, you may have some out of pocket expenses as well. In older homes you may have to re-decorate, do some painting and update the kitchen. You may also have to replace the furnace, roof or windows if they haven’t already been done and are nearing the end of their lifespan. On the other hand, many resale homes have many upgrades done to them already, and some are almost like new!
Some pros to buying resale may include living in a more mature and established neighbourhood, quality of construction, and quick closings. In many cases, a resale home can be in move-in condition, with very little (if any) out of pcoket expenses. You will also save a bundle on HST/PST taxes, which do not need to be paid on resale homes.
At the end of the day, the decision is up to you. Some people want to design their dream home from the time it is built and live in a place that has never been occupied. Others are looking save a little money and perhaps move in a little quicker. Try to make the decision that best fits your needs, and if you need help, we’re always available to talk real estate.