New Home or Resale Home
One question that many home buyers ask is ” should we buy a new home or resale home”? The following article will explore the Pros and Cons to help you make an informed decision.
Buying a new home can involve either buying from a builder or building a home on an already purchased lot. This article will focus mainly on the latter.
Pros of building a new home
-Ability to choose custom finishes: these may include flooring types, counter tops and other upgrades
-When buying a new home from a builder they often come with a Tarion warranty(if purchased from a builder)
-House is built to current building codes: often older homes don’t meet current building codes
-House model and size can be picked in advance
-Resale of new home is generally higher compared to resale
Cons of building a new home
-Development charges- even before you can put a shovel into the ground development charges must be paid in advance. Depending on Town or City they can range between $18,000-$25,000. Check with you local Municipality to confirm even before buying your lot.
-Low lying lot:Before you buy a vacant lot make sure the lot is high and dry. A low lying lot will require fill to be brought in at high cost. Evaluate even before buying the lot.
-Supply,Generally speaking there are a less lots available for sale compared to resale homes. This is the current situation in Wasaga Beach, Collingwood and Clearview Township. Your area may differ. This could affect the desired location you choose to live.
-Deadline: Are you under a time crunch? Problems may arise with contractors getting the work done on time, Building material supply.
-Financing: Financing new home construction is more complicated than resale. Mortgage insurance is not accessible so a construction loan is the most common route to go.
-HST will be applicable if purchased from a builder. Many builders will incorporate the HST in with the cost of the home.
Pros of Resale Home
Location: Love a certain neighbourhood? Resale homes offer the advantage of searching neighbourhoods that meet your needs. Perhaps being close to downtown, school or a church is an important factor.
Pricing:Buying a resale home may save you some money. A fixer upper in a great neighbourhood would be a great opportunity to build some equity in your home.
Cons of Resale Home
-Condition: Home may be older and have underlying problems. The help of a qualified home inspector will bring most major deficiencies to light but minor items can be missed.
-Resale value may not be as good compared to a new home.
-No home warranty
There are many factors involved when deciding between a new home or resale home. Your current financial situation and time frame to move are considerations when making your decision.
Andrew Weaver is a licensed Realtor® with the Southern Georgian Bay Real Estate Board.
Serving Wasaga Beach, Collingwood and Clearview Township.