Things in your world are finally lining up, you saved a down payment, you're feeling secure at work and you are just feeling ready! It's an exciting time for sure; in fact, I get excited just writing this piece thinking about how I felt when I bought my first home. I love working with first-time buyers because not only is it great to see that first-time excitement (it is never matched again) but I also get to see them grow as buyers along the way. I witness an evolution from what they thought they wanted too what they end up choosing. The difference can be significant sometimes, but it's always satisfying at the end of the road to see just how much a first-time buyer develops their understanding and appreciation of the real estate market.
One of the first things I am often asked from a first-time buyer is “should I buy a new home or a resale?” My first answer is always the same, “either way you should have an agent on your side looking out for your best interests” and quickly followed up with “it depends on what is important to you”. Now, I understand that comes off as a vague answer and you might be thinking not overly helpful right? Fair enough, so I will do my best to explain.
First, I think it's important to distinguish the two types of “resale” in our market today. We have older homes that could feature a more quirky character or may need updating. Alternatively, there are lots of “modern resale” properties purchased within the past 5-10 years but are back on the market for sale already. Both are resale properties but as you can imagine are very different animals. For this conversation, we are going to focus on the more abundant resale properties that are over 10 years old and brand spanking new homes!
One thing we all know is that one person's positive can be another person's negative. For that reason, I avoid categorizing into Pros and Cons. Instead, I like to educate my buyers about both property types and let the buyer decide if that’s a benefit or drawback for them. Okay, let’s get going…
• Offers a brand-new community with sparkly new homes and roadways
• Usually found in the suburbs away from the major hub of the city. However, you can now find new-build homes closer to the city center where developers tear down old homes and put in (infills). Infills tend to be pricey and are usually found in communities that are in transition.
• Neighborhood amenities may not be well-developed depending on how far along the community plan has come.
• Depending on the stage of development you might have to get used to living in a construction zone for a while.
• Builders may offer special financing options.
• Typically, more expensive, per square foot than a resale.
• The price set by the builder is often non-negotiable. You may be able to negotiate the cost of upgrades. Beware of the show home trap – often these homes have every upgrade and could push the price much much higher than the advertised price.
• You will be covered by the New Home Warranty Program.
• Appliances are under warranty, and all the surfaces are fresh, clean and new and do not need updating.
• You’ll need to pay GST on the final sales price. * partial rebates may be available.
• You may be required to pay for landscaping and/or sod or seeding and or fencing – if possible, negotiate these items into your purchase price.
• Your home will likely be more energy efficient – saving you $$.
• Many new communities have Homeowners Association (HOA) fees – they cost more but your community will look lovely.
• Don’t be surprised if you’re move-in date is delayed, often a builder’s timeline can run over.
• If you purchase early enough in the building process you may get to pick some of your finishing’s (yah!!).
• Established neighborhoods typically have more developed infrastructure, schools, and businesses.
• The walkability score of established communities is often higher – its nice to have the ability to walk to neighborhood stores, schools, community centers, etc.
• Mature communities typically offer established parks, tree-lined streets, yards with large mature trees and well-established parks and green spaces.
• Older communities tend to have more variety in the design and character of the homes.
• Resale homes are typically less expensive per square foot than new builds.
• The price is usually negotiable!
• Sales data is available for older communities so you can more easily establish a fair market value for these properties.
• Over the years you will consistently spend more on the maintenance of an aging home.
• If you do plan on completing renovations (beyond cosmetic upgrades) you will need to budget for the additional cost to bring your home up to current building codes.
• The home may be less energy-efficient if upgrades have not been completed to windows, furnaces, etc.
• Often in older homes, the basement may already be finished, saving you the hassle and cost of doing it later.
• There is no GST on a resale home.
• Resale homes have negotiable possession dates making it convenient for people with specific move-in timelines• Your home is move-in ready (although you may be planning updates) so you won’t have to wait up to a year to move into your new home.
I always stress that there is no right answer to the question. There is no right answer to which type of property is a better buy. Rather, I work with them to help them clarify what is most important to them, where are they willing to compromise and what are they can not. Taking the time to view inventory of both kinds will go along way in sorting this out ...and let’s be honest house shopping is a ton of fun!! So, don’t rush it, take your time, take notes, ask lots of questions and enjoy the ride! You don’t need to find the perfect home- I do not believe such a property exists – you just need to find the perfect home to fit you, and your needs, where you are in your life right now! The one certainty I do know is that your needs will change throughout your lifetime and the great thing is that in the world of Real Estate nothing is forever!!