New Home Construction Pros and Cons
Buying a new home construction is more than choosing a new dwelling over a decades-old home. Instead, it’s the kind of decision that can have knock-on financial and lifestyle consequences.
Undisputedly, a home is a long-term purchase. It requires deep reflection before you can be confident that you are making the right decision. During this thought process, it’s common to examine your intentions and purpose for a home to ensure that your final decision satisfies your short and long-term needs, especially if you’re looking to buy your first home in Fredericton or Oromocto
While contemplating a home’s must-have components, it’s reasonable to consider new home construction. After all, the New Brunswick market is experiencing a sharp increase in property development. Partly due to the number of vacant lots, but also as a result of demand outstripping supply. New home construction is bound to come into the equation if you’re on the market. But is the contemporary veneer all that it seems to be?
The Benefits of Purchasing A New Home
Many homes still in development allow you to make significant changes to the property’s layout to meet your desires. This customization enables you to save money you would otherwise have to spend upgrading a resale home to satisfy your particular tastes.
Brand new homes come with features that can be quite appealing. Conveniences like built-in washers and dryers, open-plan layouts, and spacious bedrooms are some of the most common traits in newer builds because they reflect current demands.
If all goes according to plan, a new home purchase is a turnkey solution to living the lifestyle of your dreams. Because the transfer is made from the builder to the buyer, there is a reasonable expectation that you won’t run into repairs for the foreseeable future, which is something you can’t guarantee with a resale home.
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The Downsides of Purchasing A Newly Constructed House
While modern construction has its benefits, there are also significant downsides that are easy to overlook. Many new properties are built with contemporary materials that are significantly cheaper – and sometimes inferior – than their older counterparts. These materials allow builders to charge less for properties. However, few of these materials have been tested over 20 or 30 years. Therefore, you could run into issues with the construction once the property begins ageing.
Lack of Foliage
If you’re dreaming of a charming garden, you probably want the trees that add character and warmth to the space. Some newer developments only have lawns, with maybe some freshly planted young trees, but not much in the way of a garden. Rural lots might be partially clear-cut for a home build and may not even include a lawn. For a few years, while construction takes place around you, it may also not be ideal to start a garden.
Living in a Construction Zone
If you are purchasing a home within a development district, be prepared to deal with construction for the foreseeable future. This is possibly the most substantial downside if you enjoy peace and quiet. Not only are your new neighbours’ houses being constructed but often builders will also be building roads and common areas to fulfill the requirements of a neighbourhood. Furthermore, as more families move to the region, the need for local amenities also becomes a necessity, meaning additional construction.
The Benefits of Purchasing A Resale Home
Many resale homes undergo some modernization by previous owners. However, they may still lack the modern features that are prevalent in new homes. Even without contemporary design aspects the construction of older homes essentially means they have “good bones.”
Neighbours are a vital part of determining how livable your home will be. Resale homes are often in more established neighbourhoods, as a result, the residence will have a significant – personal and sales – history to it. Because of the properties and area’s history, you have an idea of what the market value will be for your home should you consider selling.
While the newer homes built in New Brunswick are full of character, older homes have the charm and style that make them classic. Because many resales form part of a historically significant era, they are not privy to the design trends that may fall out of favour in a few years. It’s always a good idea to explore the resale homes currently available for sale before ruling out the purchase of an existing home.
The Downsides of Purchasing A Resale Home
The Need for Modernization
If you want the features common in modern homes, a resale may not be the best option. While many resales are comparable in price to new home constructions, the cost of modernizing a home can be rather steep, something you’ll avoid altogether by choosing a new home construction.
The older the home, the more upkeep it requires to restore it to good working order. Usually, this results in a property needing quite a bit of maintenance and repairs. Furthermore, replacing many of the materials used to build older homes will be more costly than newer homes as the materials are not readily available.
The True Cost of Buying a Newly Built House
On paper, the cost of buying a new home can be quite appealing. As new home constructions, especially in New Brunswick, mirror the province’s average home price, they can present themselves as bargains for the square footage and plot size. However, on closer examination, you will notice that what seems like a good deal for a property is often fraught with hidden costs.
Cost of Delaying Occupation Date
While a home is in construction, you are essentially purchasing an occupation date. During development, it is common to make decisions based on your occupation date. Therefore, pushing back the occupation date by one day can have a domino effect that can put a strain on your finances. Consider what could happen if your occupation date changed last minute, perhaps due to work delays, material shipments taking longer than expected? Where will you reside, where will you store your belongings, what happens to pets, deliveries, etc? Not only are short-term accommodations pricey, but the toll that this type of situation can have on your wellbeing can be substantial.
Cost to Upgrade
The model home is only one example of the final build of your home. Most of the features on display in a model home are upgrades, which cost more than the base price. Builders often use the art of staging a home to make their product stand out. Therefore, it’s crucial to look past the veneer to determine what the home will look like in a bare-bones state and if you love the bare-bones state as much as you do the trimmings.
Cost of Little-Known Fees
It is possible that during the occupation, you may need to pay to hook up electricity and gas in addition to other fees substantiated by your builders. If you haven’t scrutinized your legal agreement, these fees can come as a surprise and make the cost of occupying the home unfeasible. In some instances, these fees can be as high as 6% of the property’s price. Your expert REALTOR® can help minimize these unexpected costs through representation during the purchase process.
Unlike resale homes, new homes are subject to Goods and Services Tax and Harmonized Sales Tax, which can significantly increase the price of the property. When adding these fees to the overall cost of buying a new home development, it may be less of a bargain than you anticipated. Even considering these potential costs, the best way to navigate the waters of new home development is to do it alongside a trusted REALTOR®.
If you’re buying directly from a builder, keep in mind that builders are not subject to the same fiduciary responsibilities as REALTORS®. Therefore, it’s more likely that you will receive unbiased feedback and advice from your REALTOR® than from a builder, something you need when you’re making a serious life and financial decision.
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