by Stuart Neal
on Thursday, August 9th, 2018 at 10:24am.
Many home buyers particularly first-time home buyers are drawn to new homes and its easy to understand why. Nobody but you will have lived in the home and in some cases, you can tell the builder what you would like to have included in the specification. Other people are drawn to ‘pre-owned’ or resale homes. In this blog we examine the pros and cons of each option.
Pros: Buying a new home, particularly if you can have some input into the design process, may be the closest you will ever get to owning that perfect home. All the materials that go into your new home will be new and therefore maintenance should be minimal at least for the first 5 to 10 years.
In most cases, the overall design of the home will suit your modern lifestyle and the construction quality will meet all the latest design standards.
Cons: You may get less for more money. Your home will be built using todays material and labour costs which are generally higher than in times gone by.
There will be many hidden costs. Don’t forget to factor into your budget the costs of adding window coverings, appliances, landscaping, decks, paths and lots of those other knick knacks like coat hooks and closet organisers.
You should also consider location. Unless you can afford to buy an infill home, or perhaps buy into a newer developments like those in Riverdale in Edmonton you will be living on the outskirts. In general, the best locations sold out years ago.
Pros: In general resale homes offer better value for your money. You may also get a better location.
Your home will likely offer you more relative to the price, as it was built using yesterday’s material and labour costs. Many of the hidden costs have already been taken care of. For example, in most cases your purchase will include: appliances, window coverings and the landscaping. If you choose a community that is a few years old you will notice an abundance of trees as you drive in. This appeals to many and is good for the heart.
You should also consider chronological age and effective age. Home appraisers use these terms all the time. Essentially what it means is that if a home was originally built say 30 years ago, but it was renovated to include: roof, kitchen, bathrooms and windows etc. its effective age that is its comparative age, may only be 10 years. Its something to think about.
Cons: You may have to compromise on style and design. The home may be older, so you should factor in some costs and time for re-modeling and maintenance. Sometimes your search may take a while. However, with the current over supply of homes on the market you might be able to pick up a bargain. See our July Market Report for details.