New or Used Home?
Many people have asked themselves this question before purchasing a property. It is necessary to know all the different advantages and disadvantages for each of these choices. It is in your best interest to review these before making a decision.
It will often arrive within a couple that one prefers purchasing a new home while the other would prefer a used one. This might remind you of your situation or someone close to you.
We will start by identifying the different points for purchasing a new home and a used home. Then we will create a comparison sheet listing the advantages and disadvantages for both types of properties.
A NEW HOME?
If you decide to purchase a new property, you should verify that the contractor you have chosen is licensed and registered. Also verify his record, if he doesn?t have any complaints in his file, then you can be pretty sure that you can have confidence in their work.
Once you have selected a contractor, you will then need to select the model you want and how you want it completed. For example, what type of flooring do you want? Hardwood floors, laminate, ceramic, etc? Contractors normally do not include the costs of these popular materials in their first estimate. Therefore, after adding these choices to the base model, your final invoice will be higher.
Remember to ask your contractor if the GST and the PST are included in the price. When purchasing a new home, you are responsible for paying both taxes according to the purchase price. For example, if you purchase a home for $200,000, the taxes will total more than $30,000!
In the original negotiated price, the basement is unfinished, and the landscaping, excavation, paving of driveway, and the fence are not completed. You should expect an additional cost of at least $20,000 for these items. This amount can be higher depending on the materials used and the square footage of your land.
It is recommended not to decorate (except painting) during the first 12 months. This will allow you to see any cracks that appear and repair them.
One other point to keep in mind is to take the time to visit the construction site often. This way you can check the progress of your home and verify that things are being completed according to the approved plan. Make sure that the framing is being done according to your approved floor plan. Once the work has been completed, it is too late to make changes. You might have heard of someone that has faced this situation and know that it is very unpleasant.
On average, you will spend at least 100 hours of your time on the construction site. This is an investment of your time that will allow you to better understand the construction of your home and verify the quality. Remember the saying, ?Time is money??
A USED HOME?
If you decide to purchase a used home, you should visit several different ones before deciding on the one that fits you. Don?t believe that the first one you find will be the perfect one, you risk being disappointed.
When you visit a used home, you have to be able to look past existing color schemes and decorations, especially if you don?t like them. You have to have the sense of observation and the capacity to visualize the changes needed in order to make the home yours.
There can also be several ?small renovations? to complete that will demand not just your time and skills, but also a good amount of patience. You will not be able to complete everything at the same time; it is better to space out the projects.
Try not to pay too much attention to the cleanliness of the home when visiting. They might not have the same amount of time as you will have to devote to cleaning. Or, maybe they just don?t have the same obligations or principles as you. However, it?s definitely better to visit a neat and tidy home that will leave you with better memories. Always keep in mind the two most important things, the floor plan and work needed.
You should always verify the roof, windows, plumbing, electricity and foundation of the home. If there are repairs to be done, you need to know about them so that you can plan financially. These repairs can considerably modify your original budget.
New Home VS. Used Home
You will find that the main advantages listed for a new home will become the disadvantages for a used home and vice versa.
New Home ? ADVANTAGES
- Has never been lived in;
- All accessories are new;
- The neighborhood is generally new;
- Floor plan is designed to your taste;
- You can add accessories to the plan before signing the contract (i.e. Adding a fireplace);
- No major repairs will be needed for the next couple of years;
- You can apply for grants/loans;
- You can use your RRSP if you meet the requirements;
- No inspector is needed to verify the construction.
New Home ? DISADVANTAGES
- Must pay the GST and the PST according to the purchase price;
- Might not be completed by the date promised;
- Landscaping will not be completed;
- Basement will be unfinished;
- Yard will not be fenced;
- Driveway will not be paved;
- It?s not possible to decorate for a certain period of time;
- It?s possible to find omissions or errors in the construction;
- If the neighborhood is under construction, this will mean noise and dust for a certain time period;
- You must pay the transfer tax (Welcome Tax)
Used Home ? ADVANTAGES
- You do not pay the GST and the PST when you purchase a used home. You can therefore apply this amount towards renovations or purchasing a better home;
- Generally, the basement is finished, landscaping done and the yard is fenced. Everything is included in the purchase price;
- You will have an idea of how the house looks because you have already visited it;
- The area is usually already developed, therefore you will not have construction noise or dust to deal with;
- You can start renovations on your property without having to wait;
- You can use your RRSP if you meet the requirements.
Used Home ? DISADVANTAGES
- You will need to paint the home according to your tastes which will require you to invest a certain amount of time;
- You will need to plan financially for repairs to the roof, windows and any other possible major repairs over the next couple years, or sooner;
- You will have a major cleaning to do when you arrive. The previous owners might not have left the home clean and you will probably want to get rid of any bad odors;
- The previous owner might have purposely hid information regarding the state of the property leaving you with problems you weren?t expecting;
- You cannot receive certain government grants/loans;
- You must pay the transfer tax (Welcome Tax).
www.bytheowner.com
