When you’re on the hunt for a new house, it’s vital you know exactly what type of home you want. One of the biggest questions you’ll need to ask yourself is whether you want to buy a new home or purchase a resale. Both options have their pros and cons and open up a hive of additional questions.
If you’re not yet sure of the answer to any of them, read on to see just what the differences are between buying old and new. We’ll discuss the advantages and disadvantages of both, allowing you to weigh up your options and make an informed choice.
Location & Lifestyle
When choosing between old and new homes, location can be the biggest factor that drives your decision. Resales are typically found in built up, established neighborhoods that enjoy a full infrastructure. Local amenities such as shops, schools and access to urban transit are likely to be close by, as well as green spaces. If you’re looking to live in the hustle and bustle of a city center or an established neighborhood, a resale is your best bet.
New builds are typically built in up-and-coming neighborhoods in the suburbs and likely involve a commute into town. Especially for new neighborhoods, it may take several years before the roads are completed and shops and schools within walking distance are available. In such neighborhoods, a car may be essential in lieu of reliable public transport and local facilities. Of course, in more developed new neighborhoods, you can enjoy fantastic brand-new roads and facilities.
Closely linked to location, your new neighbors can also have an impact on your choice between old or new. When buying a resale in an established neighborhood, you can easily see who you’ll be living among. In such areas, it’s generally a mixture of different people, from young families to the elderly and house sharers and renters.
Nowadays, modern neighborhoods are typically designed with a certain demographic in mind. The focus could be on families, young professionals or retirees. Of course, the demographics could change for the next new build a block away, potentially transforming the area a few years down the line.
The character of the neighborhood may be important to you as well. Firmly rooted tree-lined streets and defined green spaces are common in older neighborhoods, while newer ones may be lacking this kind of character for a few years to come. The style of your new home also comes into play, with older neighborhoods offering a mixed bag of architectural styles, while more modern areas often feature cookie cutter housing.
Do you yearn for an old-fashioned house, oozing with history and architectural oddities? Or, do you crave the clean, modern, open spaces of newer houses? Bear in mind that older homes have been well and truly lived in, with the stamps of previous residents firmly imprinted throughout. Of course, you can easily make your own mark and make it your own. New houses, on the other hand, are fresh and untouched—a blank canvas ready for you to do what you like with them.
Purchase Price & Fees
The vast majority of house hunters are on a budget and strive to keep the fine balance between keeping costs down and ticking as many boxes as possible off the wish list. On a square-foot basis, resales are generally less expensive than new houses and the price is generally negotiable. This can work both for or against you depending on whether there is a bidding war.
On the other hand, new homes are generally for sale at a set price and typically cost more per square-foot than a resale. Depending on the stage the construction is at, you can negotiate the price of fittings, fixtures, and upgrades and get exactly what you want. Move-in dates for resale houses are generally flexible, allowing you to move in whenever suits you, while new homes may be delayed in construction due to bad weather or a host of other reasons—potentially leaving you stuck.
Buyers of new homes are also required to pay HST/GST (Harmonized Sales Tax and Goods and Services Tax). This adds an additional cost to your home which may be added to your mortgage if the builder includes the tax in the price of the house, or it may need to be paid upfront. Fortunately, there are rebates, and if your new house is valued at less than $450,000 before tax, you may be eligible for a partial discount.
Maintenance & Renovations
Another key element to consider when weighing up the pros and cons of new and old is the potential maintenance and renovation costs. Old homes will require more regular maintenance than a new build and may even need work doing to bring them up to current legal building codes and standards. You may wish to renovate or at least redecorate, which will add additional costs to the overall price of your home.
Older houses are more prone to essential home components breaking down and needing to be repaired or replaced, which can be very expensive, especially if you need to rewire the entire house. Besides the financial cost, this also takes time, and for any major renovations, your new home may be a building site for some time.
On the other hand, new homes offer a turnkey solution. You can be sure everything is up to the current legal standards and that all the components are brand new and have never been used before. If there are any repairs that need doing further down the line, you’re likely to be covered under the home’s warranty.
Overall, both new and old homes have their up- and down-sides. It generally boils down to your own preferences for location, character and whether you want a simple turnkey solution or are happy to put some extra effort into getting your new home up to scratch. If you’re still undecided, try writing up a list of all the pros and cons for your situation and visit a selection of both the new and the old.
This article is intended for informational purposes only and should not be deemed as legal, financial or investment advice or solicitation of any kind. Before purchasing real estate or insurance, always consult with a licensed attorney, financial advisor, insurance agent and real estate broker.