Buying a New Home Instead of an Existing Home in Ontario? Consider These Advantages and Disadvantages First
August 10, 2017 | Posted by: Richard Allatt
If you're pre-approved for your mortgage and planning on investing in real estate in Ontario, then you're going to have two main options: to buy an existing home or buy a new home. An existing home is a house that has been lived in before, whereas a new home is a house that has just been constructed and has never been lived in, although the term also refers to houses that are still in the pre-construction phase. There are a lot of advantages to buying a new home, but you may want to consider the drawbacks as well before you make a final decision.
The Advantages of Buying a New Home
If you decide to buy a new home that's still in the pre-construction phase, then you'll be able to customize the house while it's being built. This means that if you want a finished basement or a luxury kitchen, you can have them integrated into the home design. What you see is what you get when it comes to existing homes, which means that you may have to invest in major remodeling if you want additional features.
No renovations necessary
There's always a chance when buying an existing home that you will need to put money into repairs and renovations, especially if the house you are buying is relatively old. You can be comfortable in the knowledge that a new home won't require any additional renovations or repairs.
A new home will boast new appliances, HVAC equipment, electrical systems, plumbing and more, all of which should run smoothly for years without needing repairs. With an existing home, many of these features may be old and outdated, not only requiring more maintenance but potentially not working as efficiently either.
Lower utility bills
New homes are typically built with more environmentally friendly materials and make use of newer -- and therefore more energy-efficient -- appliances and systems. More and more construction firms are implementing green building practices as well. All of this results in a home that's not only friendlier to the environment, but also much more energy efficient, resulting in lower energy costs for the homeowner. Many appliances and systems built decades ago are outdated and inefficient. The same goes for the building practices from 'back in the day,' which means that older homes are much less efficient.
The Disadvantages of Buying a New Home
A new home is typically much more expensive than an existing home. You can expect new homes to cost as much as 20 percent more than a comparable existing home. You should also keep in mind that all of those luxury features and amenities that you want when customizing a new home can add up to make the home substantially more expensive.
Less convenient location
Many new homes are built in developing communities. This means that if you are one of the first homeowners in the neighborhood, you may end up living in a development that won't be completely finished for years. You'll have to deal with the eyesore of construction all over the area. You could also face the risk of ending up being a homeowner in a development that's never finished at all because funding ran out, in which case your house loses a tremendous amount of value. Another thing to consider is that many newer developments are built farther away from amenities such as schools and grocery stores. This is in contrast to existing homes in established neighborhoods where amenities have already popped up throughout the years.
Existing homes tend to have a lot of character due to their design, whether it's an old American craftsman-style home or a Victorian-style home, to name just two of many examples. These existing homes have a lot of charm due to the amount of architectural details inherent in their style. New homes lack these details and are typically built more with function in mind, which means they lack the charm and character of older homes.
Homebuyers have a lot to consider when choosing between a new home and an existing home. New homes certainly have their advantages, from their customizability to their overall energy efficiency. However, they have their drawbacks as well, including the initial price and the potential location. Keep these advantages and disadvantages in mind and make your decision based on your specific homebuying needs.
It's worth it to start a conversation today, I have 30 years of experience in credit management, personal lending and mortgages. Together we can find a financial solution to fit your needs, and get you into your new home.