Price is an understandably big focal point when buying a home. While the asking price on a home is important it’s definitely not the same as value. For example, which home offers more value: a slightly more expensive home close to work or a property with a lower price but a 40-minute commute?
Buying a new home generally offers the best value, even though new homes are priced higher than resale. Why? While buying an older unit may seem like a steal, the property will likely lack the amenities and in-demand features of a new property. An aging building will also cost you more in the long-run in terms of higher condo fees and assessments for repairs.
Beware of bargain prices that come with high maintenance fees! There will also be a more limited selection in terms of neighbourhood and property type and you won’t be able to customize your home without costly renovations that could have been done in a new property build at a lower cost.
Rather than focusing on the best “deal,” you should be looking for the best value for your money and lifestyle. Here are some ways in which a new home can offer you the most for your money.
1. Contemporary Living Space
A resale can be a good option if you want to move to a specific neighbourhood without new construction, but keep in mind resale homes have been built to someone else’s needs and preferences. A resale will likely need renovations to bring the home up to your standards, a prospect that’s both costly and time-consuming. With a new home, you’ll walk into a living space that’s already modern with the features that today’s buyers want, including master ensuites, walk-in closets, open floor plans, and upscale finishes.
2. New Home Warranty
A home warranty offers valuable peace of mind. All new homes in Alberta include new home warranty protection that covers labour and materials for one year, delivery and distribution systems for two years, the building envelope for five years, and major structural components for ten years. While a home’s warranty can be passed on to subsequent owners, buying a resale means parts of the warranty, if not all, will likely be expired.
3. Reduced Renovation & Repairs
A brand new home means new energy-efficient appliances, a new roof, a new heating system, fresh paint, and more. In resale homes, the appliances and systems in the home may already be in need of replacement and there may no longer be a warranty. Most resale buyers need to make repairs or renovations within the first few years. A new roof alone can cost about $8,000 while new flooring may run up to $15,000. While you can choose which features you want to upgrade in a resale home, you’ll probably still need to put money into at least a few home improvement projects within the first few years. A new home can offer a better value by eliminating the need for repairs and renovations during your first years of homeownership.
4. Ideal Location
Choosing to buy an older property will limit your choices in terms of finding a popular Edmonton neighbourhood, a fact that can sell you short when it comes to getting a great “deal.” Buying a new home can offer a better value when it means buying in a location that’s convenient for you. Not only will the time you spend travelling be reduced, so will your transportation expenses.
5. Mortgage Financing Assistance
Home builders generally have preferred lenders they can recommend for obtaining a mortgage. This can give you the opportunity for customized financing or other incentives. Because preferred lenders are already familiar with the development and property details, the mortgage process will likely be faster and easier. A home seller, on the other hand, cannot do more aside from helping a bit with closing costs or coming down a little on the home’s asking price.
6. Early Home Buy-in Perks
If you’re considering a condo or townhome, you may have the opportunity to get an even greater value by choosing to buy during pre-construction. While your home won’t be ready for some time, you’ll have the greatest control over customization and you may get incentives to buy early that can get you into a neighbourhood you would otherwise not be able to afford. In many cases, the value of the unit has already increased by the time you move in as amenities are added and demand increases.
Don’t be fooled by the higher cost of a new home; an older property listed at what seems like a bargain will probably cost you more in the long run. There are dozens of ways in which a new home can offer the better value, from the high-end updated finishes and prime location near existing amenities to the home warranty and incentives. To find the home solution that offers you the greatest value, don’t forget to consider the long-term costs of the property and your needs, not just the asking price.
Photo credit: home value rising, home location
