WILL IT BE NEW OR RESALE? GETTING THE DECISION RIGHT
Each has pros and cons, so know what you need, advises realtor Patrick Morris.
Choosing a home is one of the biggest decisions you’ll ever make. Whether you’re a firsttime buyer or a repeat buyer, the process is always a combination of exciting and scary — you’re investing hundreds of thousands of dollars into a property, so it’s best to take your time. You should feel both emotionally satisfied and financially comfortable that you’re buying a home within your budget and that you feel confident in its value.
While focusing on finding a home that fits your priorities and needs is important, you should also consider whether you want to purchase a brand new home or a resale home. Each has its pros and cons and it’s important to figure out which considerations are most important to help you make an informed investment.
NEW HOMES
Homebuyers looking to invest in new homes are often able to custom-design their spaces: They can select their own lot, house layout and design and the finishings for the kitchen, bathrooms and flooring. Everything is shiny and brand new, ready to be used and in no need of repair. New homes also come with a full home warranty from Tarion, a private corporation that regulates new home builders in Ontario and aims to protect the rights of new-home buyers.
On the other side, new homes involve higher costs and more risks. Although a new home can be built to have the exact style and features you desire, make informed decisions about which features involve upgrades and which do not — it can set you back quite a bit. Keep in mind that HST/GST is applied to the price of a new home and can significantly increase your overall costs.
Although properties will be sodded by the builder, extras such as patios, fences and landscaping are the buyers’ responsibility. In a subdivision, you’ll need to plant your own trees and hire a contractor to build any add-ons you desire. Also, be ready for years of construction: Infrastructure can take a long time to materialize in new developments.
Most new developments are in suburban areas, which can mean a longer commute.
RESALE HOME
Homeowners looking to invest in resale homes often receive a lot of perks, in comparison to new homes. In most cases, the landscaping is in place — including decks, patios and fencing; the homes are often equipped with appliances and window coverings; and they may have finished basements. In addition, resale homes are often in established neighbourhoods, which can give you an accurate sense of what the community will be like to live in. All of the infrastructure is in place and there won’t be any surprises when it comes to the housing surrounding the property. Also, resale homes are exempt from the HST.
When investing in a resale home, consider that upkeep for an older home can be more expensive, given the age of appliances, plumbing and electrical systems. You may need a new roof or furnace sooner than you think. In addition, old windows and inadequate insulation can drive up heating bills and there may be unexpected repair costs. And, lastly, resale homes do not come with a Tarion home warranty.
While both types of homes can fulfil your needs, consider the differences between investing in a new home versus a resale home. As one of Canada’s top real estate agents, Patrick Morris is the leader of the Morris Home Team and a Broker with Royal LePage Performance Realty. Patrick can be reached through morrishometeam.com or follow him on Facebook/Instagram @morrishometeam
Be ready for years of construction after your move-in date: Infrastructure can take a long time to materialize in new developments.