One of the most common questions we get from new homeowners is Should we buy a brand new home or go with a resale home instead?
And I always ask my clients multiple questions before giving them an answer. Afterall, buying a home is not a dollars-and-cents debate. It's a choice between different lifestyles. Some people love the clean lines of a modern space while others fall in love with architectural embellishments of older homes.
1. What location would you prefer?
With Resale homes: You have options in more established neighbourhoods, you have greater access to urban transit and have established infrastructure that gives you the ability to walk to neighbourhood stores, schools, community centres and places of worship
With New build homes: You have a brand-new community complete with new roads, Usually found in inner suburbs and bedroom communities (such as Beaumont). However, you can now find new-build homes in established and mature neighbourhoods where developers buy, tear down and build new (often called an infill). Neighbourhood amenities are often not well-developed and you are typically dependent on driving to all shops, community centres and other points of interest.
2. Are you particular about the purchase price?
Resale homes: They are calculated on a square-foot basis, resale homes are typically less expensive. Good thing about resale homes is that price is negotiable. This is great as long as there is no bidding war or multiple offer situation.
New-build homes: They are also calculated per square feet but are typically more expensive. Typically the price set by the builder is non-negotiable but what you can negotiate is the cost of upgrades.
#3. Have you factored in other costs associated with your home purchase?
Resale homes: Over the years you will consistently spent more on maintenance with a resale home due to the general wear and tear. If you do plan on renovating you will need to take into consideration not just the remodel costs, but additional costs to bring your home up to current building codes. For instance, if you plan on adding a basement suite, you will be required to add a second furnace/heating source and noise barriers. If you want to remodel, but keep your home’s current character, you’ll need to take into consideration that matching and replicating older building materials can be quite hard and quite expensive
New-build homes: While new-builds are built to current building code standards you will have to pay extra for anything over and above the basics. One new-build buyer was shocked to find out that their french doors from the living room to the dining room were not only extra, but the sashes—the wood dividers that break up the big piece of glass in the centre of each door—were another additional cost. You’ll need to pay GST/HST on the final sales price. On a $450,000 that’s another $22,500 (if you live in Alberta and have 5% GST. It could be less or more depending on the province you live in). But you won’t need to budget quite as much for annual maintenance or upkeep because the home is new. If there are defects you can usually get this repaired under the home’s warranty (just be sure to check the warranty guidelines and time limits). Also include the cost of landscaping and/or fence.
4. Do you love the character of old homes? Or the clean lines of a new home?
Resales homes: They often come oozing charm and character. Whether its the tree-lined street or the unique facades that lend character to each house. Inside you can find architectural details, such as vaulted ceilings and built-in cabinetry, that lend a unique feeling to each home
New-build homes: Usually offers open, updated living spaces with clean, modern designs, you’ll need to pay extra for architectural upgrades, such as high ceilings. If you buy and move-in to a new-build while the community is still being built you’ll need to get used to living in a construction zone