Should you buy a new home or an old home?
By Melanie Chambers • Bankrate.com

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 home.

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 taxes.

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.

Energy concerns
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.

Upgrades
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
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.

Unknown factors
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.

Restrictions
"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.

Melanie Chambers is a writer in London, Ont.