When you’re looking for a home to buy, one of the biggest decisions is whether to buy a resale home through the MLS® or whether to go to a developer’s sales centre and buy a brand new unit off plan. Both decisions have their advantages and disadvantages, and knowing what those are will help you make the right choice for you.
- Resale homes purchased through the MLS® tend to be cheaper per square foot than a new home – and there’s no GST to pay.
- Resale homes are already built, so you can go and view the exact home you will be living in – no nasty surprises about space, feel, views and so on.
- As the resale home is already built, there’s no waiting years to move into your new place.
- What you see is what you get – and a home inspector can inspect the unit thoroughly, in person, before you remove subjects.
- A resale home has been lived in before – the unit’s fixtures and fittings, will unlikely be brand new (unless it has just been renovated) and may wear out sooner.
- The building also won’t be brand new – and the older the building, the more wear and tear it will have, which means maintenance costs.
- You’ll have to pay Property Transfer Tax on the purchase – unless you are exempt (first-time buyer and purchase price is under $500,000).
- You’ll get a brand new, never-before-lived-in unit that is (or should be) in top-notch condition and will be under a New Home Warranty.
- New home developments usually have great amenities and be in established or up-and-coming neighbourhoods.
- You could have the chance to customize your unit to your own tastes, or at least choose from colour and design options offered by the developer.
- If the home is under $750,000, you’ll be exempt from Property Transfer Tax.
- New homes are desirable, which means they tends to cost more than resale homes per square foot – plus you have to pay GST.
- Your chosen home won’t be built yet, so there could be a long wait to move in – and even if the value drops in that time, you’ll still pay the contracted price (which is also true if values increase). Plus a lot can change during that time and you need to be sure you can get a mortgage and a down payment for completion date.
- You might get a pretty good idea of the home you’ll be getting, but show suites and floorplans can sometimes seem quite different than your finished unit – especially in terms of intangibles like views and “feel”.
- There’s a lot of paperwork and other risk-mitigation factors to consider – you have to be sure you’re getting what you pay for.
Whether you choose a resale or presale home, make sure you work with an A-team of real estate professionals – REALTOR®, lawyer and mortgage broker – to ensure you get exactly what you want and can afford.