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Old house or new house?

After watching his sister toil with the so-called quirks of renovating a 100-year-old Victorian home in downtown Toronto, Peter Moffatt took a very different tact, opting instead for a new build on the outskirts of Cambridge, Ont.

“I liked the idea of everything being brand new, from your floors to your countertops — you don’t feel like you’re inheriting someone else’s mess,” says Moffatt, who is among the 25 per cent of homebuyers who purchase a brand new home.

 

It’s an age-old debate — the pros and cons of buying a new versus resale home. Doug Blackstock of Royal LePage in Kingston, Ont., says it really comes down to the buyer’s mindset. “People value different things and both options have their advantages and disadvantages.”

Davide Baldassarra agrees. He’s done both and is now in the middle of renovating a new-to-him house in Mono, Ont. “The established trees and landscaping is huge plus.”

 

Not sure which is right for you? Here are 11 points to consider:

Character: Older homes tend to be celebrated for character and (depending on age) quality of workmanship. However, if layout or features aren’t exactly to your liking, renovations are a consideration. “You have limitations as many walls are fixed and it’s very costly to reconfigure,” says Baldassarra, adding with a new home you build it the way you want it.

Customize: The great thing about a new build is you can customize everything — from cabinets to floors to paint and window coverings. When you take possession your home will be in move-in condition. On the downside, says Moffatt, “You’re not supposed to wallpaper for a year or finish your basement for the first five years.”

 

Costs: With resale homes you go in expecting to negotiate price, but there is little wiggle room with most new builds. And, the starting price is just that — a starting price, says Blackstock: “I’ve never seen anybody go in and pay $250,000 for what’s advertised as a $250,000 house.” Standard materials tend to be on the cheaper side, so if you want to make your new build truly your own, you’ll want upgrades for which you’ll pay a premium.

 

New isn’t perfect: Just because a home is new doesn’t mean there won’t be any issues. “As your house settles things pop up — you just hope it happens before your warranty expires,” says Moffatt. Mitigate risk by hiring a home inspector and ensuring you have a comprehensive warranty.

 

Know thy builder: “Some of the builders go out of their way to please clients because they know what goes around comes around; some use cheap materials and cut corners,” says Blackstock. “Research your builder and ask what they’ll do for you and what they won’t.”

 

Green: New homes are often more energy efficient due to construction technology, as well as updated heating and cooling systems. In addition, layouts, such as laundry facilities on the second floor or walk-in closets, tend to better suit today’s lifestyles.

 

Value: Older homes offer mature landscaping. The fence is already built and the home will likely come with other upgrades, such as a garage door opener, outdoor lighting, walkways, window coverings, and perhaps a pool or air conditioning. The previous owners may well have put tens of thousands into home improvements so you won’t have to. With new homes, yards and green spaces will initially be quite sparse. Greening the exterior may require substantial investment and it could take several years to look the way you want.

 

Lot size: Typically homes in new subdivisions have smaller lots than those built several decades ago. “When you buy from a plan you don’t get a sense of how close neighbours will be,” says Moffatt, who was drawn to his builder’s promise of wide lots, but didn’t realize out back he’d be looking into his neighbour’s kitchen. In addition, his yard was graded on a slant so he can’t install a pool.

 

Neighbourhoods: Usually with an established home you’re buying into a neighbourhood with a distinct personality and reputation. You know what you’re getting in terms of demographics, schools, shops and amenities. “With a new neighbourhood you don’t know the dynamics — it takes a while and you may not like how things shape up,” says Moffatt. “People come first so there are not a lot of amenities in the beginning.” New subdivisions are usually pre-zoned for schools, recreation centres, shopping centres and parks. Check the fine print to get an idea of how yours will develop.

 

Waiting: Moving into a resale home usually involves a set 30 to 90 day wait, while a new build can drag on. This is something to consider when securing a mortgage, says Peter Majthenyi, a mortgage planner with Mortgage Architects in Toronto. “If new construction closes beyond 120 days there is no mortgage interest rate guarantee, so there’s a bit of a risk and buyers may end up with a higher rate.” Some builders have on-site banking reps who offer guaranteed rate caps, however these tend to be a little higher than you’d secure through a mortgage broker.

 

Stages: When buying a new house, look into the number of phases planned and when they are to be completed. If you’re among the first to buy, expect to be living in a construction zone with dust, dirt and noise. If possible, buy later in the development once builders have ironed out any issues.

 

The decision to buy a new build or resale home often comes down to personality and what you’re willing to give up for what you want. While some people argue there is no better feeling than being able to customize their space, others couldn’t live in a neighbourhood-in-waiting.

 

Either way, it comes down to finding a house you can call home.

By Michelle Warren, Bankrate.com, June 28, 2011
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