Hi,
I am thinking about buying a house and hot sure if I should go for New house or existing house? which one is better?

Ram

-----------------------------------------------------------------
Desi Lion

Ram,

New or Resale is a matter of choice, budget, preferences and location. I could have written a lot myself on this subject, but that would have amounted to 'reinventing the wheel'. Besides, some may have considered the opinion 'biased' or in 'conflict of interest'. I am therefore reproducing a blog on one of the Toronto's real estate blog sites. Hope you will find this very helpful:

http://toreal.blogs.com/toronto/2005/12/buying_resale_v.html



Home Buying: Resale vs. New
It can be a difficult decision whether to purchase a resale home or a new home from a builder

Although new homes typically have a higher sales price than comparable existing homes, buyers are willing to spend more up-front with an understanding that part of what they are paying for is assured low maintenance costs. A builder's warranty, along with brand-new roof, appliances, furnace, and other operating systems that make major repairs unnecessary, work together to counteract possible slower appreciation initially.

Buying New Versus Resale
In today's highly competitive market there is a vast array of choices to be made when deciding on the type of dwelling you wish to reside in. Below is a comparison of the advantages and disadvantages of buying a new home versus a resale home.

Advantages of a New Home
One of the primary advantages of buying a new home is the ability to decorate your home from the beginning exactly the way you want. You can pick all the colors, which range from paint to carpet. You can also make the tile and cabinetry selection for the kitchen and bathrooms.

Often, new homes will have more modern conveniences, better insulation and can be more energy efficient.

Disadvantages of a New Home
Unfortunately, with a new home purchase you should be prepared for the on-going construction you will find around you. Chances are that your grass and lawn will not be in, your driveway will be gravel and your street will turn into a sea of mud whenever it rains or snows. If things are going to go wrong with a newly constructed house, they will appear in the first one to two years. As the house settles you may find cracks appearing in the walls of the basement, especially near any windows in the basement, make sure you get them fixed right away. Also, you should not finish your basement in a new home for at least a couple of years, just in case cracks and leaks develop.

There are additional expenses associated with new homes that you will not typically find in a resale home. For example, you may have to spend additional money for appliances, curtains, drapes, central vacuum, humidifiers, decks, fencing, electric garage door openers, finishing the basement, walkways, outdoor lighting, indoor light fixtures, trees, shrubs, gardens and landscaping, children's play sets, swimming pool, air conditioning, etc.

Closing costs are typically higher for new homes. The purchaser will pay for such additional costs as the New Home Warranty Program, tree planting, utility hook ups and paving of the driveway.

Usually, when you buy a new home, you don't have an opportunity to see the actual layout. All that is provided is a blueprint and in many cases the end product may be a disappointment to the purchaser because of changes that the builder or sub-contractor does not follow or does themselves. Additionally, there is the uncertainty as to who will be your neighbours.

Advantages of a Resale Home
The major advantage of buying a resale home is that you are moving into an established neighborhood. Your lawn is green, your shrubs are growing, your driveway is paved and your trees are well enough established to give your street a feeling of permanence. Often, most extras are already present, such as appliances, curtains, drapes, central vacuum, humidifiers, decks, fencing, electric garage door openers, finishing the basement, walkways, outdoor lighting, indoor light fixtures, trees, shrubs, gardens and landscaping, children's play sets, swimming pool, air conditioning, etc.

In terms of investment, a resale home will often give you far more value than a brand new home. Many owners put tens of thousands of dollars into home improvements ranging from small items, such as landscaping, to major projects, such as a finished basement or any of the items above. Although these improvements will make the home more attractive to potential buyers, they may not increase the market value of the home. A $35,000 swimming pool or a $15,000 finished basement or even $5,000 worth of landscaping may make the home very attractive. However these additional costs incurred may not necessarily increase the market value of a home, especially if you have to sell it at a time of year where these major items add little or no perceived value. The buyer gets the home at its real fair market value, which is based on comparable homes for sale or sold in the neighborhood. All those expensive extras may be included in the home with benefit to the buyer at little or no extra cost. This can be a substantial savings over buying a new home.

With a resale, the vendor's asking price is almost always negotiable downwards unlike the builders list price which is usually firm. Any extras or changes are added to the list price of a new home and add up quickly.

Disadvantages of a Resale Home
A small percentage of homes in the marketplace are not considered to be in move-in condition. If both live-in partners happen to be working at full time jobs, a move-in condition home is by far the best alternative. If the property is being under \"power of sale\" or the property has been rented for many years the home may require a lot of work. If the buyer is not handy or does not have the additional up front capital then the purchaser would be better off buying a home in move-in condition or a brand new home. Additionally, as a home gets on in age certain systems such as heating, cooling, roofing, and/or windows need to be upgraded.

Although some perceive the paragraph above as a disadvantage, some consider it as an advantage. A home that needs some fixing up can in fact present some clear cost advantage to a buyer. Usually, it can be purchased below the going market value, while at the same time providing an opportunity to have it decorated to suite your specific tastes.

Neighbourhood: Known or Unknown Factor
When you buy a resale home, you can find out a lot more about the property and the neighbourhood before you buy than when you buy a new home. Land to support new-home developments usually is located on the outskirts of town. Potential buyers should ask the developer about future access to public transit, entertainment activities, shopping centers, churches, and schools. Local zoning ordinances also should be reviewed. A rather remote area can turn into a fast-food-chain haven within a couple of years. Try to ensure that the neighbourhood, if not strictly residential, will not begin sprawling out of control.

Buying into a new-home community may seem riskier than purchasing a house in an established neighbourhood, but any increase in home value depends upon the same factors: quality of the neighbourhood, growth in the local housing market and the state of the overall economy. One survey by the National Association of Realtors shows that resale homes do have an edge over new homes when it comes to appreciate. The trade group's figures show the median price of resale homes increased 3 percent between 1994 and 1995, compared to 0.8 percent for new homes in the same period.

More Questions and Items to Consider
There is a major decision early in the process of purchasing a new home and that is whether to build a new home or purchase a resale home already on the market. The following provides some considerations that may help you make an informed decision.

Location, location, location. Are new homes being built in the area you desire? Do you know the surrounding zoning and what will be constructed in the area? How far away are services (schools, stores, hospital, doctors, etc.) that you need? How long is the commute to work?

Investment. Typically, due to the continual addition of features, rising labor and material costs, new homes cost more than similar resale homes. Are you having to pay significant impact or lot levies or taxes and fees that are imposed on the builder? Are the taxes on the new home much higher than a comparable resale home? Will you be in the new home until the area is built out so you will not be competing with the builders should you need to sell the home? Is the home going to be high priced compared to other homes built or going to be built in the area?

Features. Are the style and features that you desire only available in a new home? Can you find a resale home with most of the features and amenities you desire? Can you add the features you desire to a resale home? Are newer resale homes available that meet your needs?

Risk. Is the new home builder or developer financially stable? Is the builder a large well known company with a good reputation? Is the builder asking for significant down payments or advance payments? Are there complaints lodged against the builder for shoddy work or not making repairs? Has the builder been delivering homes when promised? Check with your Better Business Bureau, the town or the city and talk to homeowners that have purchased a home from the builder.

In summary, a resale home can cost less, be more conveniently located, you know the area and amenities and have less risk involved. A new home can be constructed to have the exact style and features you desire, but usually with much higher costs, limited locations, and more risk.


Conclusion
In today's market place both new and resale homes are selling briskly. Once you've evaluated the pros and cons of each alternative, you can make an intelligent, educated decision as to which option is best suited for your particular needs.

Ultimately, the decision should be based on your needs and wants, your family and/or children, your tolerance for risk and the unknown and ultimately your budget.

December 9, 2005 in Buying Toronto Real Estate

-----------------------------------------------------------------
Rajeev Narula, Broker, REALTOR®
ACE TEAM REALTY INC., Brokerage
10 Kingsbridge Garden Circle, Suite 704
(Opp Square One - HWY10/403)
Mississauga, ON L5R 3K6
Bus: 1-888-355-3155 Ext. 300
Fax: 1-888-443-3155
Email:
Web: http://www.RAJEEV.ca" rel="nofollow">LINK

Quote:

---

Originally posted by ramrao

Hi,
I am thinking about buying a house and hot sure if I should go for New house or existing house? which one is better?

Ram

---

-----------------------------------------------------------------
Recommended Services- Servicedomino.com
http://www.servicedomino.com

My experience.

I bought a new house from avery reputed builder. Our community has around 400 to 500 homes in uptown Toronto. I moved in 2001. No complaints so far. Have not really spent any major amounts. But keep in mind this is a city house so I have a very small backyard and frontyard. I did spend some money on fencing but less than $500 as my neighbour build the fence and I paid my share of material only. But the builder was responsible for landscaping, shrubs, lawn. He even threw in asphalting of the one parking spot even though it was not in the contract. Apparently, the sales agent told few people that it was included in the purchase price so people complained when they found that asphalting was not part of the package. So builder threw in asphalting free for everybody. The house is very energy efficient.

The only thing I will complain about is that for my backdoor he used small screws. I understand that is the standard today's builders use. So one of the heavy guys (burglar) was able to push the door open.

But other than that I am happy. The location is great. Downtown is 15 minutes drive without any highways. Shopping is right in front of the house. TTC is at the door step. New subdivisions are being build around my community. High park is close. Humber river is close.

Lana2005, you may the odd (pr should I say lucky!!) one who has not spent so much on a new home, but the figure quoted by jake3d is close to reality. The big ticket items are -

*appliances (not all builders provide them)
* finishing the basement - depnding on the size could alone cost upto 30k
* Air-conditioner - again not all builder provide that
* drapes & blinds - may seem like a small item but could cost in the range of 2-5k, maybe more, depending on choice

EDIT: Also add the following -
* Deck / Patio (Thanks jake3d)
* Driveway / Patio interlocking

-----------------------------------------------------------------
SS
Reiki Grand Master

Quote:

---

Originally posted by sudesingh

Lana2005, you may the odd (pr should I say lucky!!) one who has not spent so much on a new home, but the figure quoted by jake3d is close to reality. The big ticket items are -

*appliances (not all builders provide them)
* finishing the basement - depnding on the size could alone cost upto 30k
* Air-conditioner - again not all builder provide that
* drapes & blinds - may seem like a small item but could cost in the range of 2-5k, maybe more, depending on choice

---

Quote:

---

Originally posted by lana2005
When you get the stuff in India who is counting Rs.

---

-----------------------------------------------------------------
Recommended Services- Servicedomino.com
http://www.servicedomino.com