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New or Resale?

I'm looking for a property... is it better to look at new or resale?

Garry, Toronto

 

Great question Garry.  The answer to this is that it really depends!  The most important things to consider are your buying criteria, current financial situation and timelines.  If you buy something new, you'll likely have to put down at least 10% to 15% of the purchase price as most builders require at least that to meet their deposit requirements.  If you come across a well priced unit in a great location, have the money liquid and you don't mind the wait, then it may not be a bad option.  However, if this is going to be your first home that you're dying to get into and you were thinking of putting down less than the 15% as a total downpayment, then I'd say your safer to opt with the resale route. 

To be honest, I'm not much of a fan of new condos... I've sat though a couple of clients getting burned with occupancy periods, living in construction, crazy high levies, builder's lawyer & admin fees and other closing costs.  Not to mention that the cost for new condos these days are quite high per square foot compared to what currently exists on the market and you can't negotiate.  Builders are selling at post-construction prices and a lot of times, these 'post construction' prices are not even justified in today's market.  If you're going to take the risk of investing your money into a new venture (which is quite a high risk) then it makes sense that you should be rewarded with a high return on your investment, but with builders selling at post construction prices, there is no room left!!  We've had clients that are not even able to break even when they count all the costs, inconvenience and headache they had to incur.  Then factor in that the project was 1.5 years late and by the time they got it, that one bedroom suite was no longer sufficient for their growing needs and that half the building was rented out, thereby decreasing the quality of the residents.  And then, the new condos are usually tiny these days and the construction definitely wasn't as good as it used to be...

On the downside, if you pick up something in the resale market, you might have to put in some sweat equity into it to customize it to your tastes, especially if it's in one of the older buildings.  So if you don't have the time, know how, resources or finances to do home improvements, then you might want to pass.  When comparing old to new, it's a size vs. finishings trade off in most cases these days.

Well, that's just my ten cents... I'm the type that likes to see, touch and smell the real estate I buy and I'm all about value.  There is a certain allure about buying new, being able to pick your own finishings, being the first one to call it home, but it's going to come at a cost - both time and money... I rather pay with sweat!! 

Until next time...

Posted on Tuesday, December 5, 2006 at 04:09PM by Registered CommenterElaine in | CommentsPost a Comment

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