If you are in the market for a new home, you may have considered building from scratch instead of buying a resale home. While the decision isn’t always simple or obvious, each option has its pros and cons.
Building a new home – advantages
Control over details
You can personalize the details of your home from the ground up – so you have more control over details. Everything can be the way you want right from the beginning. You can customize the paint, the flooring, appliances and much more. There will be no remodeling costs.
A new home is built to meet current building codes, incorporate the latest technology and is often more energy efficient. You will spend less on energy as your appliances will use less energy and your home will be better insulated saving you on heating costs as well.
Everything is new.
The floors, ceilings, roof, siding, appliances, windows, etc. will be brand new. Most will come with warranties that are likely to be covered for several years. Chances are that the first few years of home ownership will incur very few costs for repairs, and you will not have to deal with any unpleasant surprises!
Building a new home – disadvantages
Delays, delays, delays.
It is not uncommon for a building project to experience delays – blame a lot of this on the weather. Delays can be costly especially if you have sold your existing home and plan to move into the newly constructed home. They can also frustrate you mentally.
Issues with the builder.
Having a reliable builder is very important when it comes to getting permits, construction loans, adhering to the building code and timely completion. If you have a builder who does not cooperate with you regarding the aforementioned issues, you can experience a lot of stress and anxiety, not to mention the added financial burden that may arise from this.
You may want to factor in certain upgrades, which could be pricey, and you could end up spending above your budget.
Buying an existing home – advantages
Room for negotiation.
A resale home is usually less expensive than a new build and you have room to negotiate the price (as long as there is no bidding war.) If the market is “soft” then you can end up with an attractive deal. With a new build, once the builder has set the price, there is no more room for negotiation. If market prices have dropped, your price will stay the same.
Easier to move in.
Once the deal is closed, for the most part, you can move into your home without further delay. There is no wait time and no need for temporary housing.
Easy to visualize and renovate.
With a completed home, you are able to see the existing home’s floor plan and layout. You have opportunities for home improvements and changes from the moment you take possession of the property.
More desirable locations.
A resale home may be found in a more desirable location, with close proximity to schools, urban centers and recreational facilities; and the established infrastructure may allow easy access to these facilities.
Buying an existing home – disadvantages
May require extensive repairs/renovations which can be costly.
If you want to renovate a home that is already built, you may face a huge investment in time and money, which may not be worth the effort in the long run. Even simple remodeling can cost a lot.
Fewer amenities/older appliances.
When you buy an existing home, you could inherit appliances and home systems that may cost you money in updating or keeping in working condition. As far as the appliances are concerned, older appliances are less energy efficient and may eventually require expensive replacement.
You could experience this if you end up not too keen on the existing floor plan. You may have gotten a good deal on the price, but in retrospect you may have regrets. This could affect your lifestyle, as you would be living in a home you were not happy with.
With all that said, every market is different—just like every buyer is different. The best way to choose the option that’s right for you is to talk it over with an experienced real estate agent. Your agent will know where the deals are, whether you’re interested in the long-time neighborhoods or the up-and-coming communities. And they’ll help you decide whether building a house or buying an existing home will suit your needs best.
Contact us If you’re looking for an agent who’s willing to do what it takes to help you find the perfect home.
The latest Real Estate Board of Greater Vancouver (REGBV) report on the April 2019 real estate market, shows that buyers are reluctant to get into the market and sellers are being forced to be creative. Product that is staying on the market for more than a month is seeing discounts that were unheard of 2 years ago. For a decade it has been a sellers market. This has changed.
Residential property sales totalled 1,829 in April 2019, a 29.1% decrease from the 1,829 sales recorded in April 2018 and a 5.9% increase from the 1,727 homes sold in March 2019.
“Government policy continues to hinder home sale activity. The federal government’s mortgage stress test has reduced buyers’ purchasing power by about 20 per cent, which is causing people at the entry-level side of the market to struggle to secure financing.. Suppressing housing activity through government policy not only reduces home sales, it harms the job market, economic growth and creates pent-up demand.” Ashley Smith the REBGV President said. She added,” “There are more homes for sale in our market today than we’ve seen since October 2014. This trend is more about reduced demand than increased supply. The number of new listings coming on the market each month is consistent with our long-term averages. It’s the reduced sales activity that’s allowing listings to accumulate.”
The total number of properties listed on MLS system in Metro Vancouver in April was 14,357 – a 46.2% increase compared to the 9,822 properties listed in April 2018, and a 12.4% increase compared to the 12,744 properties listed in March 2019.
The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,008,400. This represents an 8.5 per cent decrease over April 2018, and a 0.3 per cent decrease compared to March 2019.
The all-important sales-to-active listings ratio for April 2019 was 12.7%. The general rule of thumb is that there is downward pressure on home prices when the ratio dips below 12%, and upward pressure on home prices when the ratio surpasses 20% over several months.
April 2019 Sales Stats:
Detached properties 586 (807 – April 2018)
Apartments 885 (1,308 – April 2018)
Attached properties 358 (464 – April 2018)
Click here to obtain a full report.
In these market conditions, you need to work with a real estate company that has the experience and know how on getting you the right home. Contact us and let one of our real estate professionals obtain the best results for you.