New build vs. resale: Which one is right for you?

The evergreen argument about whether or not to buy new or used is more than a dollar-and-cents debate, it’s a decision about lifestyle. So how do you decide which one fits your needs and personality?

Here are a few pros and cons in the new versus resale debate:

Location: Regardless if you buy new or resale, the real estate mantra, “location, location, location,” will always apply. However, the location you choose will depend on whether you value newly developed communities or older, more established neighbourhoods. Unless you find a builder who has bought an inner-city home, torn it down and built a new home, most new construction will be on the outskirts of major urban centres. For that reason, you will need to factor in the expense (both in terms of money and time) for the daily commute.

Price: Pricing for new and resale homes must take into consideration a number of factors. Typically resale homes are less expensive, per square foot, then new homes and this is due primarily to the escalating costs for land development. However , resale homes will almost always cost more to repair and maintain. Also, with a resale home the price is always negotiable; with a new home that’s not the case (although upgrades are negotiable, for the most part). There are also hidden costs with new home subdivisions, such as homeowner’s association fees, mandatory community assessments or property improvements, such as building a fence, that were not included in your builder’s package.

Amenities: Resale homes are often in well-built neighbourhoods whose infrastructure and amenities are already well-established: corner stores, schools, community centres and transit are typical of most resale inner-city homes, as are parks, local restaurants and neighbourhood stores. New home developments, on the other hand, will have better access to large malls, super centres and retail complexes but local amenities, such as neighbourhood stores, community and recreational centres may not exist for quite some time.

Maintenance: The charm of an older home often goes hand in hand with increased maintenance, especially if the prior homeowner wasn’t vigilant in the home’s upkeep. Building materials may be harder to replace or match in an expansion or remodel. On the other hand, most new homes in Canada will come with a provincial warranty—although you should always verify if your home is under warranty before signing any documents. This warranty should help keep maintenance and repair costs to a minimum, as should the relative newness of each component within the home.

Character: You can’t beat the character offered by a street lined with 75-year-old trees with homes built 50, 60 even 70 years ago. Inside you’ll often find vaulted windows, high ceilings, built-in custom cabinetry and architectural flares that lend character and charm to resale homes. On the other hand, new homes offer open, updated living space with clean, modern designs. The appeal really does boil down to your individual taste, but while you may find a resale home that’s been updated into a modern abode, you’ll rarely find a new-home with old-world charm.

Move-in dates: With resale homes you can negotiate a specific possession date, which makes it more convenient to plan the process of moving. For new homes, however, possession dates can often be delayed. While a few weeks to a month is fairly standard, builders have the right to delay possession for up to 365 days.
Also, if your finished new built home is among the first in your development, be prepared to navigate through an ongoing construction zone.

Your neighbours: A resale community will often provide a mixed bag of people: from young families, to renters, to seniors. These neighbourhoods will, for the most part, reflect the decades of change within a growing city. However, new developments will often attract a more homogenous buyer. “The same things that appeal to you will also appeal to others like you,” writes Ric Edelman, author of The Truth About Money and Ordinary People, Extraordinary Wealth. In fact, many developers will often target specific clientele, such as retired seniors, or new families.

Living space and design: Since building costs were lower in the past, many resale homes will offer more finished space than new homes. This can include updated or renovated attics and basements. This can mean a lower purchase price for a buyer, if the home has been updated. But if a resale home is outdated or requires upgrading, the costs can be significant, depending on the job. Also, new homes will often utilize more efficient and innovative uses for the home’s footprint. For instance, a zero-lot line development usually offers a home with more living space per square foot than a resale home on the same-sized lot. That said, new homes can’t fully maximize all the living space. Basements in new homes shouldn’t be completed for at least two, maybe three years. This allows homeowners to determine if there are any structural issues that need to be dealt with under a new homeowner’s warranty.

Customization: In a new house, you can pick your own color schemes, flooring, kitchen cabinets, appliances, custom wiring for TV’s, computers, phones and speakers, etc., as well as have more upgrade options. Modern features like media rooms, extra-large closets and extra-large bathrooms and tubs are also more attainable in ground-up construction. In a used home, you rely largely on the previous resident’s tastes and technological whims—unless you plan to spend money on remodeling or rewiring.

Landscaping: Mature trees, robust shrubs, gardens, rose bushes and perennially well-watered lawns are some of the rewards of an older home, while most new homes are apt to yield wee trees, fewer walkways and sparse vegetation. Landscaping is an expensive proposition today for the cost-conscious homebuilder, which is why this cost is often passed down to the buyer.

Energy efficiency: Unless older homes have undergone an energy retrofit, resale homes will usually cost much more, per square foot, to heat and cool. New homes, on the other hand, are built with more advanced material and technology, such as Energy Star windows and appliances and thicker insulation. That means you can expect to pay less to heat, cool and run your  new home, all else being equal.

Safety: Resale homes can often be at the mercy of home-handyman and unlicensed renovators. Or, if the home hasn’t been upgraded in decades, older technology such as knob-and-tube electrical wiring, can pose an increased fire risk. New homes are built according to the latest building codes and using the most up-to-date safety standards. That means, in general, new homes are more fire-safe and are better at accommodating security and garage-door systems.

Romana King

Romana King

Sales Representative
CENTURY 21 Innovative Realty Inc., Brokerage*
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