Advantages of a Resale Home:
The major advantage of buying a resale home is that you are moving into an established neighborhood. The lawn is green, shrubs are growing, your driveway is paved and the trees are well enough established to give your street a feeling of permanence. Often, most extras are already present (i.e. appliances, curtains, drapes, central vacuum, humidifiers, decks, fencing, electric garage door openers, finished 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 projects such as landscaping to major projects, such as a finished basement or any of the items above. Although these improvements may 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 do not add appreciable 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 home, the vendor’s asking price is almost always negotiable, whereas a builder’s list price is usually firm. Any extras or changes are added to the list price of a new home, and can add up quickly.
Disadvantages of a Resale Home:
A certain percentage of homes in the marketplace are not considered to be in ‘move-in condition.’ If both live-in purchasers are working at full time jobs, a move-in condition home is by far the best alternative. If the property has been rented for many years the home may require a lot of work, so if a buyer is not handy or does not have the additional up-front capital then buying a home in move-in condition (or a brand new home) is the best option. Additionally, as a home ages, certain systems such as heating, cooling, roofing, and/or windows will need to be upgraded.
While a home that requires some fixing up will require extra capital, it can in fact present some clear cost advantages. Usually, you can purchase these homes below the going market value, while at the same time providing an opportunity to decorated according to your specific preferences.
Buying a resale home presents the opportunity to find out a lot more about the property and the neighbourhood than if you buy a new home. If you are purchasing in a new-home development located on the outskirts of your community, be sure to ask 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 locale, 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.
Tags: Ottawa Real Estate
