Top 9 reasons to choose a resale home over a pre-construction


Working for a builder in new homes sales and as a realtor focusing on resale in the past years, I always have buyers wondering if they should go for a brand new (pre-construction) or a resale home. While there are lots of pros in buying brand new, many choose to buy resale because of the following reasons

#1- Price

New home builders price their pre-construction homes according to the projected price of the market in the future, when the home is ready for occupancy. With more than 15 years of growth in the GTA property value, you can expect to pay more for a brand-new home. The questions is – by how much do you think the market will go up by the time the home is ready for occupancy? In the resale market, you are always paying the “current” “market price” for a home and move-in date are usually within the next few months.

#2- Government charges and taxes

Property tax rate is almost always lower and more predictable in existing neighborhoods, where sidewalks, schools, recreational facilities were already built. Most new homes were built in less-developed communities with less population, which contribute to the higher property tax rates. In most brand new homes, there are development charges or government levies to cover the costs of the additional city services (eg. transit to sewers and water mains). In fact, a study, released by the Building Industry and Land Development Association (BILD) shows that on average, government fees and charges amount to more than one-fifth of the cost of new home. (

#3- Mortgage financing

Mortgage shopping for a resale home is quite straight forward. Most independent mortgage brokers and bank mortgage specialists will be able to walk you through the procedures and requirements, pre-approved you according to your debt ratios and lock the rates for 3 months so you don’t have to worry about the mortgage rate going up while house hunting. Lots of options are available on the mortgage market for you even if you are new to the country, a business owner or self-employed.

On the other hand, if you are looking for a brand new, pre-constructed home, the easiest way to get pre-approved for a mortgage is to go to the designated financial institution, while the rates offered may not be the lowest and the product might not exactly fit your financial needs.

#4- When you move in

Everyone enjoys great outdoor space where the kids can play and adults can fire up the grill. In a brand new subdivision, you might have to for a year or two for the construction workers to wrap up and install proper landscaping. In the meantime, you have to hold off that BBQ party or risk having hotdogs and burgers covered with dusts.

#5- Reading about it on paper vs. looking at the real thing

It takes lots of skills and imaginations to visualize the interior and exterior of a home relying on a floorplan and a site map. One of the most common questions I was asked when I worked in a new homes sales office was: “how big is this 5’ by 5’ foyer? Would it be too cramped to place a shoe rack and a console table and mirror set?” Also, “what is the width of this wall between the two windows? Will I be able to fit my 60’ flat screen TV on this wall?” Sometimes answers to these questions are not readily available to the sales representatives on site. Some of the major concerns when buying new are grading of the lot, location of hydro transformers, fire hydrants, sidewalks and light pole. A utility plan is typically provided but there is usually no guaranteed it will be built according to plan. Things are much simpler when you look at resale properties; what you see is what you get.

#6- Availability of inventory in your desired location

Resale properties available for sale are just about everywhere, at any point in time. If you are looking to move into a community with access to public transit, proximity to work and amenities, chances are you can locate an existing neighborhood that works for you. With lower inventory in brand new homes, you might have to wait for new development projects or try your luck with remaining inventory if you set your eyes on brand new. For the last few months, there was about ten thousands resale properties sold each month in the GTA. New homes sales figure is usually lower because of the lower inventory level and limited options in terms of location and possession dates.

#7- Neighborhood

Most people like to live in a neighborhood where residents have similar interest and lifestyle as they are. While people moving into new subdivision are usually quite homogeneous (eg. young families), you can never tell if your neighbors are noisy or if they take care of the exterior of the home as well as you do. In an existing neighborhood, you can get a taste of what your neighbors are going to be like by driving around at different time of the day, different day of the week, before making decision to buy.

#8 – If you like bungalows or split-levels

With the growth of land prices in the GTA, it’s hard for builders to justify not building the most square-footage out of any lot. Therefore bungalows and split levels are just rare to find in new subdivisions.

#9 – The help of a Real Estate Professional in your desired neighborhood

Although most condo development cooperate with real estate agents (ie. the builder will pay a referral fee/ commission to the real estate agent you hired upon completion of the transaction), many low-rise builders don’t. It means that if you would like a Realtor to help you identify your options and walk you through the process of the transaction, you might have to compensate the Realtor out of your pocket. This is something you definitely not have to worry about if you buy resale as sellers are responsible for the compensation.


Janis Tsang

Janis Tsang

Sales Representative
CENTURY 21 Atria Realty Inc., Brokerage*
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