You have decided to buy a home but wonder if you should buy a new or resale one. Below are some advantages and disadvantages of buying new homes vs. resale homes to help you make your best decisions.
Advantages of New Homes
Safety Standards: New homes are built with the most recent standards in safety and energy-efficiency. A new home will be more energy efficient, with a modern heating system and higher levels of insulation. Most old homes used materials that no longer meet today’s standards.
New Home Warranty Program: You are most likely eligible for the New Home Warranty Program which covers deposit protection, defects in materials and workmanship, building code violations and major structural defects. Timelines on the coverage vary from province to province, so you may want contact your builder for details. If you are buying a new home in Ontario, you may want to visit Tarion Warranty Corporation website. This company is responsible for administering the Ontario New Home Warranties Plan Act.
New and Modern Structure: Building materials are brand new. Being brand new, your new home should not need modernizing, updating, refurbishing or redecorating for several years to come. Everything is clean, unused and new. In addition, phone lines, TV and Internet cables are likely built inside the walls to save you wiring effort when you want to use.
Choice Of Materials: You can choose your dream fixtures, fittings, materials and colors from the builder’s range. Some builders offer you other choices or options at an additional cost.
Disadvantages of New Homes
Lack Of Services: Some services may not yet be available in new subdivisions such as public transportation, schools, shopping malls, supermarkets and other amenities. These services are usually available in established areas.
Distance: New homes are normally built outside of densely populated regions. So, it is difficult to find a new home in the urban area of your choice.
Taxes: You likely have to pay the harmonized sales tax (HST) on the price of your new home although this amount is often included in the purchase price. Property taxes may be higher in newly developed cities since the government needs the budget to provide public services such as bridges, roads, schools, libraries, fire stations…
Fixed prices: Prices of new homes are normally fixed and not negotiable.
Timing: The move-in date can be delayed for various reasons such as strikes, material shortages, regulation changes and bad weather.
Construction Inconvenience: You may have to live with constant noise and dust while the area is under construction.
Neighbours: You may not know in advance what the neighbours are like. If you end up in living near bad, troubled or noisy neighbours and have to deal with them everyday, it is a misfortune for you.
Advantages Of Old Homes
Convenience: Public transportation, schools, banks, shopping malls, supermarkets, parks, and other amenities are normally available in established areas. It is quite easy to find a home in an area of your choice.
Ready To Move Into: You can move into a resale home on the closing date in most cases. Things like lights, drapes, driveway, landscape, and air-conditioning are usually available for you. You can see the details of the home before making the decisions.
Tax Savings: You don’t have to pay the Harmonized Sales Tax (HST) on the purchase of a resale home unless it was substantially renovated.
Flexible Prices: Prices are negotiable. Normally basements of old homes are finished, while you have to pay an additional cost to finish the basement if you buy a new home.
Disadvantages of Old Homes
Less Energy Efficiency: Old homes usually less energy-efficient. So it will cost you more to run air-conditioning in the summer and heating system in the winter.
Repairs Needed: Components and materials of the home can be too old or worn out that need to be replaced.
Space Constraints: Old homes are usually small from the stairs to the bedrooms or closets, and have fewer bathrooms than new homes. Many basements do not even have 6-foot-high ceilings.
Decoration Challenges: It’s usually more difficult to decorate old homes than new homes because their materials and structures do not harmonize like new homes.
Structural Concerns: Even if you hire a professional inspector to inspect the home before buying, you may not be able to identify all structural problems and most hidden problems until you move in and live there for a while. Some old homes are damaged badly, but the former owners are very good in repairing and hiding these problems in order to sell them with the best possible prices.
