Should you buy a new home or an old home?
Do you cringe at the thought of commuting to work,
but hate being too close to downtown? That's just one of the many
factors to consider before choosing to buy a new home or an old
When it comes right down to it, many people buy homes
purely because of their personality and whether it fits their lifestyle.
For instance, most new subdivisions are full of new families starting
out -- if you have kids, a gaggle of friends is almost a sure bet
in a new subdivision. But if you're feeling antsy about a long daily
commute to work, a new subdivision may not be for you since most
are built outside the core.
Conversely, for those who are single or without children,
they may find themselves lonely in a newer subdivision and may be
better off in an older neighbourhood downtown, where they're within
walking distance to work, not to mention restaurants and bars.
There are pros and cons on each side of the debate.
Here, we've given you some of the major factors to chew on before
making a purchase.
Taxes and price
Taxes are more predictable in resale homes since most services,
such as sewer and gas, are already established. In a new subdivision,
schools and fire stations that have yet to be built can affect your
Many new home buyers don't realize it, but they
must pay the GST on top of the price of the new home. Homes worth
less than and including $350,000 are taxed at 4.48 percent, says
Bo Skapski, a Realtor with Prudential Kelowna Properties in Kelowna,
B.C. Homes worth between $350,000 and $400,000 are taxed on a sliding
scale between 4.48 percent and 7 percent, and homes worth more than
$400,000 are taxed the full 7 percent.
Another unpredictable cost for buyers of new
homes is that of building.
"Prices fluctuate with the cost of the
land, material and labour, whereas with a resale, prices fluctuate
more with supply and demand," says Douglas Paul, of Douglas
Paul Real Estate in London, Ont.
Buying a newer home can save you a bundle on energy costs. Better
windows, more-efficient heating and superior electrical services
are often standard options in new houses. For more information about
energy efficient homes, visit Natural
Resources Canada's EnerGuide Web site.
Most new homes come with an option
to purchase a two-, five- or 19-year homeowners warranty that covers
you in case something with the electrical system short circuits.
If you want to determine the efficiency
of an older home, hire an expert to test for leaks and drafts, as
well as the home's energy consumption in general. You can ask the
owner of an older home about how the house performs and ask to see
heating and electricity bills from the past year. In a new home,
however, only time will tell how well its systems run.
In a newer home, a major upgrade is easier and tends to be less
expensive. If you want an island in your kitchen, a newer home has
the space that allows for such a major overhaul. Many older homes
are built with small closets and rooms that can't accommodate major
changes to the floor plan easily or cheaply.
Landscaping is a laborious and expensive process. "I've been
in my home for four years and finally the landscaping is coming
along nicely," says Skapski. "You could easily spend $10,000
to $15,000 on landscaping in a new home."
Many older homes already have mature
trees and established gardens. But if you couldn't care less about
gardening, new homes are often built on smaller lots and that means
less lawn to mow.
In a new subdivision, there's no telling when new schools will be
built, or if they'll be built at all. And depending on whether you
are the first, middle or last home in the subdivision, you may be
surrounded by dirty, noisy construction for quite some time.
A small but important consideration
for some buyers: More and more often, mail is delivered to a central
mailbox that may be five or six blocks away in new subdivisions
and not to your door, as in older neighbourhoods.
"There are restrictions on things not harmoniously conducive
to the eye in a newer neighbourhood," says Paul. "That's
a nice way to put it -- who wants to see Fred's underwear on a clothes
line, especially Sunday morning having breakfast?" In older
neighbourhoods, on the other hand, clothes lines, satellite dishes
and noise are expected and unregulated.
Whether you decide on a new or
an old home, make sure to get a home inspection from a reputable,
licensed home inspector.
But keep in mind that a home inspector's
report won't protect you from all problems you may encounter down
the road. "Look at the small print on the contract to find
out what they are responsible for," says Colin Holliday-Sutt,
a Realtor with Royal Lepage in Victoria, B.C. "They are only
liable for making a positive statement about something that is not
in fact true."
If you do decide to get a new home,
choose a construction company that has been around for a long time;
one-time builders without a track record aren't a great bet.
The onus is on the owner to find
out about zoning for nearby land. Open fields or parks, if owned
privately, may be sitting ducks for construction of some kind.
"Privately owned land can
eventually turn into a batch of new houses," says Holliday-Sutt.
"I see people get caught in that all the time."
Ultimately, you may not have a
choice between a new or old home. Newer homes are being built en
masse and "throughout Canada the resale market is fairly tight
on inventory," says Skapski.
But whatever you choose is often
a matter of taste. Economics might only be a small factor. The people
looking for a Victorian home are not the same people looking for
something modern next to a golf course, after all.
is a writer in London, Ont.