Planning to buy a new home? Wondering if you should buy new or used? What are the pros and cons? In this episode, we discuss whether to buy a new or resale home and the benefits of each. We talk about pricing and additional fees as well as the impact of location when making your decision.
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What we discussed:
Hi everyone. I'm Karl Yeh and welcome to another Homebuyer School video, a channel where you get the latest strategies, tactics, and tips from home buying experts.
And remember, if this is your first time on this channel and you want to get the latest strategies from the experts, make sure to hit the subscription button below, hit the little notification bell, so you don't [00:00:30] miss anything.
Today, I'm joined by Cory McDonald, Community Manager with Brookfield Residential, and the topic we're going to discuss is:
Should I buy a new home, or a used or resale home?
That's a great question. Everybody's lifestyle is going to require something a little bit different. Me being from a builder, I would have a strong bias of buying brand new.
Karl Yeh: Of course. Of course.
Benefits of buying a resale home
But, there are times when buying a resale home does fit needs better:
- Sometimes time frame is a big factor.
- Sometimes [00:01:00] a resale home might accommodate a quicker timeline,
- if you're moving brand new to the city ,
- or you're being kicked out of your parents' house and needed to find something within the next month.
- Sometimes they might accommodate those needs a little bit better.
- Or older communities that you really wanted to try and be a part of, new builders might not be building in there. Which would require you to have to buy resale instead.
Benefits of buying a new home
I think there are a lot of benefits in buying a brand new build.
Karl Yeh: Of course.
The grossest one that I use would be, you're not living with somebody [00:01:30] else's toenails in your carpet.
Because it's your home.
Where you get a little bit more specific customization to the colors that are used, to the materials that are used in the home.
And you get to see the construction process from start to finish.
So it's more your home instead of buying somebody else's likes.
As far as repairs and warranty there's a benefit, because a lot of the newer homes that are coming with a warranty.
So that if there are any mistakes in the construction or if there's anything that comes up after moving in, your kind of secured in not having to [00:02:00] dump a lot of extra money into getting repairs done, because your warranty covers a lot of those issues as well.
The brand new builds are also following the latest in guidelines and code.
So that's the latest building materials and the latest energy efficiency that you're typically getting with a brand new build.
Impact of location
So obviously, and you touched on that. So they're up to code, so you might not have to do additional renovations.
But on the other side though, when you talk about location sometimes, [00:02:30] there isn't a new community that's being developed.
So the builders maybe don't build infills, they build in brand new communities.
And it might be a little bit further away than where, let's say you work, or where you want to be, or how long the commute you want to take.
And that really depends too. A lot of cities in Canada now are trying to take that initiative to revamp older communities.
So there is a stronger emphasis on infill projects. [00:03:00] Now again, based on finances, you're probably paying a little bit more to get closer to those inner cities, or into those older communities because they might have larger lots, as an example. So there are benefits in there, so you're paying a little bit more.
But you're right. Sometimes some of the newer builds, or more price sensitive builds are being built a little bit further away from the downtown core.
So is price really the only factor determining new versus used? [00:03:30] I guess maybe more what I'm saying is:
Is it cheaper to buy used versus new? Or it depends?
It really depends. It's impossible to predict market from day to day. Which is why it's not a guarantee at all.
But there is potentially an opportunity to get a little bit cheaper buying something that's either used versus a brand new build, depending on certain circumstances that the seller, they might need to get out of their [00:04:00] home really quick.
So they might be a little bit more motivated to move on the home.
So it really depends on how patient you are, and how much research you do in looking at some of these different resale homes. You might be able to get a little bit of a better deal.
Where with builders, a lot of our margins have already been set in place.
So we kind of know how low we can go, and we're usually not going to be fluctuating too much from what our margins will dictate to the home should sell for.
Additional fees to consider when buying used or new home
So obviously there's a lot of factors to consider when buying a used versus new.
And a lot of the things that we've already [00:04:30] talked about such as location, community, even fees.
So let's say you buy a house in a community, you still have to pay those fees. If you buy a Condo, you still have to pay the condo fees.
So there's a lot of things to consider when buying a used home, that you would also consider when buying a new build as well.
But as you're buying in these new communities, a lot of times there's some incentives.
Because if you are in a community that has HOA fees, or if you are [00:05:00] into a condo or a townhome that has condo fees, if you're getting into, you're pioneering a brand new site.
A lot of the times there's not only price incentives on the purchase price of the home, because you're in a construction site.
But a lot of the times those condo fees or the HOA fees are minimized initially as it starts developing. So this bodes well for resale down the road.
Because as you're buying in at that initial price, and the community starts getting built around you, those amenities become fully functional.
The value of your home is going up too, so there's potential [00:05:30] for a greater rate of return on buying a brand new home, in a brand new community versus getting into a community that's already fully established.
It might not necessarily have that same room or percentage of growth.
Yeah. So Cory, do you have anything else to add in terms of differences when we're buying a new home versus a used home?
Yeah. Again, it comes down to do your research. Have a look at resale and the new home builds, and figure out which one would be best for you.
Karl Yeh: Perfect. Thank you very much, Cory.
The question I have for you is [00:06:00]:
What are your thoughts on buying a used versus a new home?
Let us know your thoughts in the comments section below. Thank you very much for joining us and we'll catch you next time.
Let us know if you have additional home buying questions that we can answer by submitting them in the comments section below.
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About Cory McDonald:
Cory has been working for Brookfield Residential for over 5 years and has had the opportunity to