The Pros and Cons of Buying a New vs. Existing Home
Posted By: Rachel Kavanagh
November 29, 2023
A common question our clients ask is whether it’s better to buy new or existing Markham houses for sale. There is no easy answer to this question, as it always boils down to the individual.
However, there are some basic factors to consider in order to help you make an informed decision. In this article, we will take an honest look at your options, reviewing the pros and cons of buying a new versus existing home.
Buying New Markham Houses for Sale
A new home is always an exciting prospect. There’s something wonderful about being the first person to live in a house. Still, there are both advantages and disadvantages to new home purchases.
The Pros of Buying a New House
Some of the top advantages of buying a new home include the following:
- Compliance: When buying a new home, you can feel confident that the home complies with the Ontario Building Code. New builds are inspected throughout the building process and can’t progress unless they pass each stage.
- Energy efficiency: New homes adhere to the latest energy-efficient guidelines, including materials, appliances, electrical systems, doors/windows, and heating/cooling (HVAC) systems. As a result, you know you’ll enjoy reduced energy bills and improved home comfort throughout the year.
- Technology: Most new builds either include or offer the option for smart home technology to help manage energy use, operate appliances, improve security, and integrate voice-activation capabilities.
Warranty: New homes are covered under three different warranties lasting one year, two years, and seven years, depending on the materials or defect. In the first years, you can feel confident that you won’t face any major costs for repairs or replacements.
Also, many seven-year warranties are transferable if you sell before they expire.
- Low maintenance: With brand new materials throughout the house, there is little to fix around the home, making it easier to enjoy life as a homeowner and get to know your new neighbourhood.
- Financing: You might find it easier to finance a new home, as many builders include mortgage arrangements as part of the sale.
- Customization: A new home allows you to customize all your finishes, so there is no need for upgrades or renovations.
The Cons of Buying a New House
There are several cons to buying a new home, including the following:
- Delays: Construction delays are almost inevitable with so many factors impacting deadlines, including material and labour shortages, weather, delivery delays, and inspections. As a result, you could find yourself scrambling to find a temporary home if or when the deadline is missed.
- Taxes: New homes charge HST/GST, adding to your costs. Although first-time buyers can recoup 36% of the GST/HST through the New Housing Rebate, you’re still responsible for the balance owed to the provincial government.
- Undeveloped infrastructure: The newer the subdivision, the less infrastructure exists. This can mean minor inconveniences such as having to drive further to find things like convenience stores, supermarkets, etc., and major inconveniences such as a lack of bus lines, medical care, or nearby schools.
- Less equity: While almost all real estate goes up in value, subdivision homes tend to grow in value at a much slower pace than older homes in established neighbourhoods.
- Developer risks: There are just as many dishonest developers out there as there are trustworthy ones, so it’s essential to do a serious background check to make sure your builder is reputable.
- Buying on speculation: In some cases, you are buying on speculation, meaning there isn’t a model home to walk through. This is more common for condo apartments and townhouses than single-family or semi-detached homes.
- Living in a mess: When you move into your new home, you’re also likely to be living in a construction zone for several months or longer, with dusty, muddy streets, no grass, and plenty of noise.
Buying Existing Markham Houses for Sale
Many buyers are drawn to the character of older homes located in established neighbourhoods. However, there are still pros and cons to consider before choosing an existing home.
The Pros of Buying Existing Houses
Some of the best things about buying an existing home include the following:
- Character: Depending on where you’re looking, existing homes tend to have more character. You can avoid that cookie-cutter feel to both the home and the neighbourhood when you buy in an established location.
- Pricing: Although these homes tend to be more expensive, you can also feel more confident you’re paying a fair price based on market value. Your real estate agent can advise you on pricing when you make an offer. Also, you can negotiate pricing, unlike a newly built home where the developer calls the shots.
- Resale value: Existing homes are in higher demand than new builds, which means your home value will increase faster. Also, in many cases, it is easier to sell an existing home than it is to sell a new house, depending on the area.
- Fixer uppers: You can find a fixer-upper at a lower price and renovate it if you are a DIYer or willing to invest in upgrades to suit your needs.
- Viewings: You can walk through the home to know exactly what you’re getting.
- No GST/HST: There is currently no GST/HST when purchasing a used resale home.
The Cons of Buying Existing Houses
You’ll also find a few cons to buying an existing home, such as the following:
- Old materials and structure: Depending on the age of the home, you can face costly structural and mechanical issues. An inspection can help spot these issues, but many may lie beneath the walls and floors, and don’t reveal themselves until after you move in. You’re also likely looking at a less energy-efficient home, costing you more on energy bills.
- Multiple offers: When inventory is low, bidding wars can be challenging. You may find yourself in a position to compromise on closing date, terms or conditions to strengthen your offer.
- Harder to find your dream home: Existing homes often make it harder to find a home that checks everything on your list.
Contact the Real Estate Experts
If you need help deciding whether new or existing Markham houses for sale are best, the Benczik Kavanagh Real Estate Team can help. We’ll discuss your needs and guide you on buying the right home for you. You can call us at 905-477-7766 or contact us here to reach out to us today.