Buying a home is one of the largest investments you will ever make in your life. It takes careful consideration to determine whether to buy a new build, custom build, or resale home. As everyone’s needs and budgets are different there are pros and cons to buying a newly built home.
The Pros Of Buying A New Build Home
There are many pros to buying a new build home. For most, it is the excitement of choosing colours, flooring, cabinetry, and other materials used in creating your new dream home. However, aside from this, there are many other pros as well. Some of these pros include:
- Moving into a home no one else has lived in before.
- Everything in the home is brand new, clean, and in good working order.
- Having control over the details in customizing your home to fit your needs.
- The ability to add additional features to your homes such as more windows or an extra bathroom.
- The ability to have the builder completely finish your basement.
- The ability to add upgrades.
- Newly built homes are more energy-efficient.
- Newly built homes include new innovations.
- The ability to reduce your carbon footprint.
- Maintenance costs will be far less in the first few years as everything is new.
- New home warranty program to protect the buyer.
The Cons Of Buying A New Build Home
As with anything, there are always a few cons involved when buying a new build home. These cons can include:
- Poor workmanship.
- Poor builder reputation.
- Inability to get deficiencies repaired in a timely manner.
- Completion dates delayed.
- Upgrades can be costly.
- Purchasing a new build is more expensive than purchasing a resale home.
- Less room for price negotiation
Purchasing Resale Homes
There are many advantages to purchasing a resale home. When looking to buy a resale home there are far more location options available. The neighbourhoods are more established and many provide the convenience and ability to walk to stores, parks, community centers, and places of worship. Typically, you get more bang for your buck with a resale home, the price per square foot is often less expensive than purchasing a new build. There is also far more room for negotiating on the price and inclusions.
Purchasing New Build Homes
There are also many benefits to purchasing a new build home. The community is brand new and quite often located in and around suburbs away from busy urban centres. However, amenities may be further away requiring you to drive to many points of interest. When buying a newly built home the price is set by the builder and there is no room for negotiation. However, you can take advantage of incentives and negotiate on upgrades. Always keep in mind that buyers are required to pay GST/HST on the price of a new build.
When you purchase a resale home there is far more flexibility on closing dates as this is always part of the negotiation on the terms of the sale. With a newly built construction home, the closing date is determined by the builder and buyers frequently experience delays which can be a huge inconvenience for the buyer. This falls especially true if the buyer is selling their previous home and the closing date has already been established. This can result in unexpected costs such as storage of furniture and personal items as well as paying for accommodations for the interim.
If you are buying an older home the chances of it requiring a lot more maintenance are much higher. When you buy a resale home, you really don’t one hundred percent what you are getting until you actually move in. There may be some deficiencies the seller did not declare. Appliances typically are older and may need replacing sooner than later. However, many homeowners take care of their homes and update and replace things as required. Some older homes may have been insulated with asbestos and this can be quite costly to remove. However, if you have a good real estate agent, this can be a great negotiation factor. A newly built home will usually be maintenance free for the first few years, giving buyers peace of mind. If something crops up in the first few years it may be covered by the Homeowners Warranty.
The best thing about purchasing a resale home is all the extras that may be included. Extras are quite often negotiated in the terms of the sale such as window coverings, lighting fixtures, and sometimes even furniture. Many resale homes already have fenced yards and landscaping. The home may also have additional outdoor storage, gazebos, decks, and possibly pools and/or hot tubs. With a new build, these items would be an additional cost once you move in. All these little extras can be quite costly. When you purchase a newly built home you are basically starting from scratch when it comes to the convenient extras that a resale home can provide.
Obtaining a mortgage on a new build may be easier as the home is brand new and is built to the latest building codes. The value of the home is already established. When seeking a mortgage on a resale home, the lender will more than likely require an inspection to determine the value of the home.
When obtaining house insurance, insurance companies will have any questions regarding a resale home that can affect the overall cost of your premiums. They will want to know things such as:
- Type and age of the wiring
- Type and age of plumbing
- Radius to a fire hydrant
- Age of the roof
- Type of exterior
- Whether or not the home is equipped with a wood stove or wood-burning fireplace
- Whether the home has a pool
And many other key factors will determine the cost to insure the home.
When obtaining house insurance on a new build, it is much easier for the insurance company to determine the cost as everything is brand new and built to the newest building codes.