Are you at the grappling to decide between buying a resale home or opting for a new construction from a builder? It's a significant decision, one that can impact your finances, lifestyle, and overall satisfaction with your new home. Each option comes with its own set of pros and cons, making it essential to weigh them carefully before making a choice. Let's delve into the factors you should consider when making this decision.
Resale Home Purchase:
Buying a resale home means purchasing a property that has been previously owned. Here are some key points to consider:
1. Immediate Availability: One of the significant advantages of buying a resale home is that it's typically available for immediate occupancy. You can move in sooner without having to wait for the construction process to be completed.
2. Established Neighbourhood: Resale homes are often situated in well-established neighbourhoods with mature trees, landscaping, and existing amenities like schools, parks, and shopping centres. This can provide a sense of community and charm that may take years to develop in a new construction property.
3. Price Negotiation: Resale homes offer more room for negotiation in terms of price. Sellers may be willing to negotiate on the asking price or include additional incentives to close the deal. There is a more level playing field for negotiation.
4. Character and Charm: Older homes often come with unique architectural features, character, and charm that may be lacking in new construction. If you appreciate historical details or craftsmanship, a resale home may be more appealing to you.
5. Assured financing: If you are qualified to get a mortgage, you can secure the financing required and close the purchase right away. There is no risk of financing not being available subsequently.
6. Minimal Price Risk: If the offer price is close to prices in the neighbourhood and property type, then there is minimal risk of “appraised value” of the property not coming in line with the purchase price.
New Construction Purchase:
Buying a new construction home involves purchasing a property that is built or in the process of being built by a developer or builder and could take years before its ready for occupancy. Here are some factors to consider:
1. Customization Options: With new construction, you often have the opportunity to customize various aspects of your home, including floor plans, finishes, and upgrades. This allows you to tailor the home to your specific preferences and needs.
2. Modern Features and Amenities: New construction homes are built with the latest building materials and technology, offering modern features and amenities that may not be available in older homes. From energy-efficient appliances to smart home automation, you can enjoy the convenience and comfort of modern living.
3. Warranty Coverage: Most new construction homes come with a Tarion warranty, providing coverage for structural defects and major systems for a certain period after purchase. This can offer peace of mind knowing that any potential issues will be addressed by the builder.
4. Limited Inventory: Depending on the location and demand, new construction homes may have limited availability, leading to competition and potential price increases. It's essential to act quickly and decisively if you find a new construction property that meets your criteria.
5. Little Negotiation power: Its usually a take it or leave it offer that you can expect from large builder and there is little room to make changes to the purchase agreement. The terms of the agreement may not be in your favor, and you would need to get legal counsel to verify that your interests are covered.
6. Financing uncertainty: Given the long lead time for occupancy, there is often the risk that the financing or mortgage which was originally envisioned would not be available at the time of closing. There is also a risk that the property might not appraise to the match or exceed the purchase value agreed up years before.
7. Credit risk: If you are not buying a condo property, the deposit paid for the purchase is not ‘secured’. This means that if the builder goes insolvent then you could be at the risk of losing a sizeable portion or entirety of the deposit.
Conclusion:
Ultimately, the decision between buying a resale home or opting for new construction depends on your priorities, preferences, risk appetite, financial readiness, and individual circumstances. Consider factors such as timing, budget, location, customization options, and lifestyle preferences when making your decision. Whether you choose the charm of a resale home or the modern amenities of new construction, make sure to conduct thorough research and enlist the help of professionals to guide you through the process. By carefully weighing your options, you can make an informed decision that aligns with your long-term goals and aspirations.
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