No. 9 of 10 Things to Consider Before you Buy Your First Home

Buying New Construction or an Existing Home: There are many pro’s and con’s for both so whether you purchase a new home or an existing home, the choice is very personal, and up to you.  So that you can make an informed decision, let us review the pro’s and con’s of both;

A new home allows you to customize your home to your own taste before you move in; you can choose or upgrade such items as your siding, flooring, plumbing features, décor colour schemes and cabinets to name a few.    There are lower maintenance costs to start as everything is new and many items may be covered under warranty, although this doesn’t always apply if you build the home yourself.  You may be moving into a neighbourhood that doesn’t have amenities like schools, doctors, shopping areas and other services completed yet.  Don’t forget that GST or HST will apply although you may qualify for a rebate of part of the GST or HST on homes that cost less than $450,000; ensure this is detailed in the purchase agreement before you buy.  There may be extra closing costs and adjustments that apply to a new build such as utility hook-ups, municipal levies etc., that cannot be included in your mortgage financing – these can be a few thousand dollars and unexpected extra costs on closing!  You may have to pay extra for plants, trees, sod or paving your driveway.   If you are considering a new condo, then you most likely will move into the property when it is finished being built and then pay an “occupancy fee” which is like rent, until the property is officially registered with the City.  Only at that time does the condo legally become yours; this can take anything from a few weeks to months although typically around three to four months!

An existing home is in an already established neighbourhood with schools, shopping malls, services etc.  You may be purchasing a home that already has many extras included such as landscaping, swimming pool, finished basements, fireplaces etc.  You may have to redecorate, make repairs and/or renovate in order to personalize and make the property feel like your home.  There is no GST or HST on the actual purchase price but just like a new home, there is on the services of those professionals such as the lawyer, appraiser, home inspector etc.  When buying an existing home, I would recommend a qualified home inspection report is completed so you know exactly what potential repairs or maintenance costs to expect on the home in the foreseeable future. 

How do you decide?  It’s a personal choice and may well depend on your budget, availability of affordable housing in your area and your personal preference.