When purchasing a home, you have to know you are getting great quality at the right price. Whether you buy a brand new home or opt to buy a resale home, it is important to feel confident that you can live there happily for many years to come. So what are the differences when it comes to this debate: new home versus resale home?
The Pros and Cons of Brand New Homes
Pro: New Home Warranty
If you decide to buy a brand new home, you can feel good about the fact that the home is protected from damage and component failures for anywhere from 12 months to 10 years, depending on the issue. Since 2014, all new homes in Alberta are required to be covered by new home warranty, which includes:
- Labour & Materials for the first 12 months.
- Distribution Systems (heating, electrical etc.) for the first two years.
- The Building Envelope (e.g. the roof and exterior walls) for five years.
- Key Structural Components (e.g. the foundation and frame) for 10 years.
Other homebuilders may offer extra protection in their own warranties, but when you buy a new home you can be sure you’ll be covered for at least these basic.
Con: The Warranty Doesn’t Cover Homeowner Damage
Did you dent the wall moving the couch? Your teenager’s hockey team is over every day and the floors are taking a beating? If the damage was caused by excessive wear and tear on the house, or because a misused appliance caused damage, you could still be on the hook for the repairs.
Pro: Choices and Incentives
Want your flower garden to receive as much afternoon sunlight as possible? Want your home to back out onto a playground or be located in a cul-de-sac? Want to choose how the landscaping on your property is designed? Buying a new home provides these options to you because you get to decide which lot is right for you.
There may also be extra incentives available from the builder to encourage you to sign a purchase agreement, especially if purchasing in a buyer’s market. This may mean free upgrades, landscaping or a reduction in the purchase price or bonus cash that can make it easier to make a down payment or pay closing costs. Appliances and other furnishings may be included with the house when you buy it.
Con: There May Still be Construction Going On
Depending on when you move into a new community, you may have to deal with more dust, dirt and noise trailing into your home than usual. While moving to a new development is actually great for your home’s value, there can be more dust flying around and some noise to contend with. If you don’t mind dealing with this in the short term to get the home you want, then a new home is a great option to explore.
The Pros and Cons of Resale Homes
Pro: Quicker Possession Date
With a resale home already built, buyers are able to close the sale of the property and move in faster. While a new home allows you more options to choose from, once you’ve made those decisions, you’ll have to wait for your new home to be built before you move in.
Con: Older Appliances and Systems
In many cases, you will inherit the appliances and a variety of other items that the previous owner leaves behind when you take possession of your home. However, these items may be of poor quality or at the end of their useful life. This could result in additional expenditures just weeks or months after buying the home.
Pro: Mature Trees and Landscaping
Resale homes are typically located in older communities. These homes also come with completed landscaping, fences and sometimes decks, meaning this will not be an additional expense to the buyer.
Con: Renovation and/or Repair Costs
While you may choose a resale home because of its location or size, chances are there will be things that you’ll want to change. Whether it’s as simple as a fresh coat of paint or as drastic as an extensive renovation, buyers will need to budget more money for the home after purchase. Watch The Money Pit and beware!
Before you buy a home, you need to ask yourself what your needs and wants are and whether a new or resale home best meets those needs. If you are looking for something covered by a warranty, furnished with quality appliances and with all the features and upgrades that you want, a new home is more likely to give that to you within your price range.
*Originally posted March 4, 2016, updated October 12, 2018.