MyDaddyHomes: October Mid Month Newsletter: Buying New Or Resale?

Buying a resale home versus a new home?

In today's highly competitive market there is a vast array of choices to be made when deciding on the type of dwelling you wish to reside in. This article will focus on the advantages and disadvantages of buying a new home versus a resale home.

Advantages of a New Home:

One of the primary advantages of buying a new home is the ability to decorate your home from the beginning exactly the way you want. You can pick all the colors, which range from paint to carpet. You can also make the tile and cabinetry selection for the kitchen and bathrooms.
Often times, new homes will have more modern conveniences, better insulation and can be more energy efficient.
Up-to-date with the latest building codes and standards.
Maintenance costs. Lower maintenance costs because everything is new and many items are covered by a warranty

Disadvantages of a New Home:

Unfortunately, with a new home purchase you should be prepared for the on-going construction you will find around you. Chances are that your lawn will not be in, your driveway will be gravel and your street will turn into a sea of mud whenever it rains or snows. If things are going to go wrong with a newly constructed house, they will appear in the first one to two years. As the house settles you may find cracks appearing in the walls of the basement. Here are some additional advantages:

There are additional expenses associated with new homes that you will not typically find in a resale home. For example, you may have to spend money for appliances, curtains, drapes, upgrades, landscaping, air conditioning, etc.
Taxes such as the HST will apply. However, you may qualify for a rebate of part of the HST on homes that cost less than $400,000.
Closing costs are typically higher for new homes. The purchaser will pay for such additional costs as the New Home Warranty Program, tree planting, utility hook ups and paving of the driveway.
Usually, when you buy a new home, you don't have an opportunity to see the actual layout. All that is provided is a blueprint and in many cases the end product may be a disappointment to the purchaser. Additionally, there is the uncertainty as to who will be your neighbors.

Advantages of a Resale Home:

The major advantage of buying a resale home is that you are moving into an established neighborhood.
Your lawn is green, your shrubs are growing
Your driveway is paved and your trees are well enough established to give your street a feeling of permanence.
You can find out information about the neighborhood
In terms of investment, a resale home will often give you more for your value than a brand new home. Many owners put thousands of dollars into home improvements ranging from small items, such as landscaping, to major projects, such as a finished basement.
Although these improvements will make the home more attractive to potential buyers, they may not increase the market value of the home. A $30,000 swimming pool or a $15,000 finished basement or even $5,000 worth of shrubs may make the home very attractive.
However these additional costs incurred may not necessarily increase the market value of a home by the investment made. The buyer gets the home at its real market value, which is based on comparable homes for sale or sold in the neighborhood. All those expensive extras may come to the buyer at a lower cost.
Taxes such as the HST does not apply on a principal residence
With a resale, the vendor's asking price is almost always negotiable downwards unlike the builders list price which is usually firm. Any extras or changes are added to the list price of a new home.
Also homes that are 1-5 years old are still considered new, you get the best of both worlds, resale and fairly new. So there you have it, Contact MyDaddyHomes if you want more information on buying new or resale.