Should you buy a new or existing home?

Deciding to purchase a new or existing home isn’t that simple. That’s because it’s not solely a monetary debate, but also about choice of lifestyle and other factors.

Herculene Visser, Lew Geffen Sotheby’s International Realty area specialist in Tokai, says: “The only way to make the correct decision is to make an informed decision, so it is crucial to do thorough research beforehand”.

Some may like the minimalist and open-plan structure of a modern space, others may fall in love with the character and embellishments of older homes. We take a look at vital questions you need to ask yourself before embarking on your purchase.

1. What location would you prefer?

Existing homes are usually situated in more established neighbourhoods with easier access to points of interest like local shops or schools.

New homes are often built at the same time as the surrounding infrastructure. Although this isn’t always the case, neighbourhood amenities are often not well-developed and one would need to drive to various places.

2. How flexible are you with your moving date?

With an old home, the move in date is often negotiable and is dependent on when the transfer process has been concluded. This is a great help if you have a moving deadline.

Moving into a new development has some flexibility, however it mostly depends on whether or not the builders complete their schedule on time. Your move in date could be delayed resulting in disappointment.

3. Can you afford to make changes in your home?

The old saying, “they don’t make them like they used to” can be interpreted in two ways:

Properties built within the last 5 to 10 years will need minimal maintenance, while older homes, particularly a few decades old will need more. Visser adds, “If you inspect the property thoroughly before buying, or even get it surveyed, you will avoid the risk of being caught by defects that only become evident at a later stage, resulting in additional expenditure.”

can you afford to make changes in your home?

Newer homes usually have the advantage of built in modern technology and fittings. Older homes usually have older fittings so if you were to refurbish, but maintain your home’s current character, you’ll need to take into consideration that matching and replicating older building materials can be quite difficult and costly.

4. What type of neighbours do you want?

Older neigbourhoods tend to have residents ranging from renters, to young families to retirees.

Newer communities tend to attract a homogenous group of people – due to developers specific building plans and marketing strategy. They’ll usually build with a particular buyer in mind. Whether it’s urban professionals, starter homes or single family homes – they’ll build for this clientele. More than likely, these will be your neighbours.

5. Are you on a tight budget?

In the past, new apartments would typically cost more than older ones, but that’s not necessarily true across the board anymore. You can save a considerable amount of money by purchasing a brand new or off-plan property.

According to Private Property, there won’t be any transfer duty on the property and vat will be included in the price. Any transaction costs are settled by the developer. Initially there is only a 10% deposit and the rest of the payment is only due on completion. Furthermore, profits from off-plan properties can be free of capital gains tax if the property is sold before completion.

Lew Geffen, Chairman of Lew Geffen Sotheby’s International Realty, highlights that another perk of buying new from a developer is that these homes come with a National Home Builders Registration Council (NHBRC) five-year guarantee, with the roof guaranteed for one year.

 

Whatever decision you make, both new and old homes have their pros and cons. However, the more informed you are, the easier it is to avoid pitfalls and risks when purchasing your next home.

 

 

Sources:

https://www.thebalance.com/buying-newer-or-older-home-1798298
https://freshome.com/2010/08/05/the-pros-and-cons-of-buying-a-new-vs-pre-owned-home/
https://www.theglobeandmail.com/real-estate/new-or-resale-which-home-is-the-better-deal/article15462023/
http://www.moneysense.ca/spend/real-estate/buying/buying-a-new-home-resale-vs-new-build/