Many homeowners are faced with the decision of whether to buy a new build or a resale home. There are many factors to consider, like the current real estate market, the type of home you’re looking for, and your budget.
We’ll guide you through some of the pros and cons of each type and offer suggestions for what you should consider when making your decision.
SHOULD I BUY A NEW BUILD VERSUS A RESALE HOME
About 70 percent of respondents in a recent survey said they planned to buy resale homes rather than new builds. Younger buyers were more likely than older buyers to prefer new builds.
When choosing between a new build versus a resale home, there’s no one-size-fits-all solution. Much of the decision comes down to personal preference.
What style of home are you looking for?
One of the pros of buying a new build versus a resale home is that you can choose what you want and move into a brand-new house that is all your own.
New builds are designed for modern tastes and lifestyles, so they come equipped with the amenities some homebuyers are looking for:
- Stainless steel appliances.
- Dual sinks in the principal bedroom.
- Granite or quartz countertops.
- Open-concept designs.
- Plenty of storage space and energy-efficient features.
On the other hand, older homes may have architectural character and charm that can be harder to find in new builds with less variation between them.
And, as the saying goes, they don’t build them like they used to. Older homes tend to be quite structurally sound. They have ‘good bones.’
Where do you want to live?
Resale homes make up the vast majority of centrally-located homes. So, if you want to live in the downtown core, your options for buying a new build will be fewer.
Older neighbourhoods have more mature trees and, generally speaking, larger lots than newer developments.
On the flip side, newer developments are likely to have more recently-built amenities, such as modern playgrounds, and potentially, newer schools.
Another consideration is that if a new development is targeted to a particular buyer, it can help you meet others in similar life circumstances.
A development targeted at retirees may make it easier for retirees moving to a new area to make friends. Everyone else will be new too. Similarly, a new development geared to young families will likely be occupied by other families with children, which can help to develop a sense of community. Some people will prefer the diverse mix of households that comes with an established neighbourhood.
Of course, buying a resale home doesn’t necessarily imply purchasing an older home. Many newer homes come up for resale as well, so let’s look at the costs and risks associated with having your home built versus buying an existing home.
How much do you want to spend?
One of the most significant influencing factors when considering buying a home is cost. Still, the ticket price of the house isn’t the only consideration. Here are a few other costs to keep in mind when comparing the two.
A new build can be designed to your specifications so that you’re unlikely to need to spend a lot of money on repairs or renovations for at least the first few years in your new home. New builds are also covered under warranty by Tarion.
Having said that, be aware that the cost of upgrades in a new build can add up quickly. The price you’re quoted initially may not include many of the features you end up choosing.
Do your due diligence when looking at a new build by finding out what the base price includes and how much the upgrade packages will add to the price.
If you buy an existing home, you’ll probably want to make it your own. You might want to upgrade the kitchen, replace flooring or redecorate from top to bottom. All of these will add to the overall cost and should be factored in when comparing prices.
An older home can also require major unanticipated renovations, such as costly upgrades to electrical and plumbing systems. This is why home inspections are strongly recommended, particularly when it comes to older homes.
Utility costs are generally lower in newer homes because they’re built with modern energy-saving technology and materials.
What’s the market like?
We mentioned the additional complexity the pandemic has added to the new build versus resale equation.
One factor is the seller’s market that we’ve seen for the past year and a half. Some buyers have grown tired of losing bidding wars (we don’t blame them). They worry that they’ll pay too high a price or buy a property without having an inspection done, which could lead to greater costs down the road. That can make buying a new-build, where the price is agreed upon upfront, more appealing.
Buying a new build is not without its own risks, though.
The build can end up taking longer than anticipated or may not go as smoothly as you’d hoped. With the added strain of supply chain issues brought on by pandemic lockdowns, the risk of delays increases due to potential material supply shortages beyond the control of the builders or developers.
An added risk when buying a new build is that you’re gambling on where the real estate market and mortgage rates will be once your home has been built, which could work in your favour, or it could work against you. That unknown is an additional potential cost to take into consideration when making your decision.
As you can see, there are many factors to consider when choosing between a new build versus a resale home. Have more questions? As experienced realtors who know the market inside and out, we are well equipped to answer all your questions. We can tailor our expertise to help you find your perfect home. Give us a call today. We’d love to meet you!
Buy and sell with confidence. Choose MacDonald Property Group.
At The MacDonald Property Group, we have a dedicated, national award-winning full-service team all under one roof, ready to provide the expertise you can trust. Our team and associates are recognized as the top 1% in North America since 2010.
With over twenty-five years of experience in all aspects of real estate, we have bought and sold well over a thousand homes. We’ve been honoured to help thousands of clients in Barrhaven and across the Ottawa area close a deal with confidence and satisfaction. Give us a shout, and let us show you what we can do for you!