Shopping for your first house can be fun – especially seeing what’s new in home decor — but with all the choice, making a decision can be a challenge. A good place to start is either new or resale.
“Whether it’s your first time buying or your tenth, deciding depends on personal preference and location,” says Elton Ash, regional executive vice president of ReMax Canada West in Kelowna, B.C.
It’s hard to deny the appeal of a brand new home with all the latest in kitchens, baths, fixtures, he says, and there’s a warranty that backs the building, foundation, finishes, etc.
A resale home’s biggest appeal is its history – being in an established area, solidly appreciating value, nearby retail, schools, green space, plus a sense of neighbourhood.
But location is a multi-faceted issue, Ash adds. New homes are usually found in subdivisions, so there’s commuting if you work downtown. That adds to the time and money bottom line, so that needs to be weighed with the house price. Ash has noticed an increased desire for suburbs with good rapid transit connections. The new suburban home also offers lots of home – both in size and lifestyle extras — for the money.
Alternatively, look at condos. Like houses, the new ones boast all the bells and whistles, while resale condos tend to be bigger for the same price. And “with a little elbow grease,” Ash says you can transform them like new.
Rodney Litigio, a Toronto mortgage consultant with buyingblock.com, a home buying service geared particularly to first time buyers, says it’s important to weigh out all the pros and cons of both new and resale – namely the location versus price, and brand new versus repair potential.
ALWAYS REVIEW THE FINE PRINT
It’s important to ask about all the various costs of a new or resale home. Resale homes have set closing dates and costs: the house is already built, and closing costs are roughly 1.5 per cent of the purchase price.
New homes can be a different story. Says Litigio: What you see in the sales brochure, for example, may not be what you get so “when you sign a new purchase agreement, always try to make the sales brochure part of the agreement.”
The same goes for closing costs. New homes are subject to additional municipal levies – for development, education, and so on – so closing can cost up to four per cent of the purchase price. Litigio says you can negotiate to cap how much you’ll pay of those closing levies, with the developer picking up the additional.
“That’s why it’s always important to have a lawyer review these documents, to ensure there are no hidden clauses,” Litigio adds.