new homes vs reseale homes

[john_hay]

Hi guys,

My first post here. Currently we own a townhouse in Woodbridge Area. Last year was doing business in Burlington and loved the city and people (cheers!). Our mortgage renewal date is in two years so basically I am thinking of moving to Burlington.

First question is what's the smarter buy new home (from a builder) or a resale house.

Is buying from builder always more expensive. I red here articles about ridiculous closing costs associated with buying from builder.

I know that the resale house needs more maintenance, but apart from that(even if we buy a resale house we will buy a relatively new one, 3-5 years old so this is not an issue)

Also as I said mortgage renewal is in two years, so if I am buying new house, when should I start hunting for it? It takes time to build the house though.

Please share your thoughts with me.

John

[the_Nixons]

Hey John,

If we're sharing thoughts, then let me say that this TimBit I'm eating is delicious and it's very windy outside.

Oh… about buying a house…

I would definitely say that Burlington is a good decision for you, but then, that's a very personal choice and I'm not you.

If it's close(r), or at least accessible to work, then by all means. I would, however, consider buying new as opposed to resale. I question your thinking that buying resale is less expensive. It all depends on what you're looking for in a home. Closing costs should be budgeted into your buying decision. The builder gives you price X, but you should always keep in mind all of the variables that go along with that (ie: upgrades, air conditioning and all that fun stuff). There are builders who are currently selling new homes that may not close until your desired date, so I would definitely start looking now for new construction if your mortgage is up for renewal in 2 years and you're interested in a change. The salespeople are usually pretty helpful in this regard.

[john_hay]

yeah it sucks outside. just came back from a short walk timmies are OK

now the housing.

The thing is this. I am sort of a newbie in this "buying a new home" market. When you say A/C and all that sort of fun, I am not sure that I get what you mean Funny huh? For me not that much.

Closing dates: got that. 2 years seemed to me too much to start now, but according to you for some builders it's not that much.

The only communities I found were in Alton Village and there were sundail and fernbrook building there (correct me if I am wrong). I am looking form a small 27-36 LOT 3 bedroom detached house and from their websites I got that their communities are already built, and not to be built in 2-3 years or so.

I understand that there are Phases that probably will follow but where can i find an info about this?. Call a salesperson?

Maybe there are some other builders building that I am not aware of? Huh?

[GinaM]

hi John,

I think new vs. resale is a matter of preference. For us, a new build was the way to go because we had more control over the finishes and layout. We're not really DIY'ers so we didn't want to have to deal with changing things to get what we like.

If you are open to looking at resales, there are a lot of beautiful options that are under five years old. The plus side of that would be that A/C (air conditioning), fencing and things might already be done.

I'd say if you are looking for new, I'd start looking as Nixon suggested since delays should be factored in if the builder is not on time.

I know Fernbrook has lots available in their most recent phase and I believe Sundial does as well, since a friend of mine just bought. I know a few people in phase 3 of Fernbrook with estimated closing dates of fall 2011.

[john_hay]

MLS # H3049097 says 367.500 for a detached house with partially finished basement. Is this the price we should be considering when buying similar new home (the basement would not be finished all course)?

[VolgaOwner]

When it comes to houses, to each their own. I've done both and there are certainly pros and cons to each. Very, very high level, here goes:

NEW:
PRO- usually cheaper to buy, comparatively speaking (new and resale are relatively close at the time of purchase, but buying new allows you to reap property appreciation without paying for the house).
CON - Significant deposit necessary
PRO - Get to pick your lot, finishes, floorplan, colours, upgrades, etc.
CON - You have to pay for things like lights in showers, a/c, garage door openers, window coverings, appliance and hookups, fencing, etc
PRO - You are not inheriting someone else' problems/bad reno jobs
CON - possible closing delays and the time it takes for builder fixes to be completed

RESALE:
PRO - can have larger lots in more mature neighbourhoods
CON - might need $/effort to reno and make your own, wear and tear on propery
PRO - fences, a/c, door openers, security system, fences, gardens are probably done
CON - may be inheriting someone's probem house
PRO - closing costs are significantly less than new, not living with mud and gravel, bus routes are established, etc.
PRO - can sometimes get a deal is the property is dated or sellers need to sell.
CON - much harder to upgrade certain things (speaker wiring, conduit, plumbing, electrical), and older (15+ years?) homes typically have 8' ceilings

Again, just a high level list, but it all depends on the person. Happy shopping!

[john_hay]

thanks VolgaOwner. Things starts to clear in front of my eyes. I am not that DIY person so most probably i will look either new or up to 5 y.o home to buy. if buying resale i need to wait for another 2 years.

what's average (estimated) funds would i need buying a 350 K house from a builder? most likely they ask some deposits upfront, after you pay another portion and when you move in you most likely pay for what's left + closing costs and the rests transfers to your mortgage? Is this math correct?

[lynnM]

Originally Posted by john_hay

thanks VolgaOwner. Things starts to clear in front of my eyes. I am not that DIY person so most probably i will look either new or up to 5 y.o home to buy. if buying resale i need to wait for another 2 years.

what's average (estimated) funds would i need buying a 350 K house from a builder? most likely they ask some deposits upfront, after you pay another portion and when you move in you most likely pay for what's left + closing costs and the rests transfers to your mortgage? Is this math correct?

You may want to check out the Sundial and Fernbrook websites. I am pretty sure starting detached prices are around $400K(Sundial)and much higher starting prices with Fernbrook. Builder wants $20K deposit.

[VolgaOwner]

NP

Anyone, please jump in if I am wrong!

The builder would want anywhere between between $5-10K upon signing the initial purchase agreement. Then, after your bank and lawyer review (10 days), you need to provide the remainder of the deposit for a total of between $20-30K. The remaining balance (including hookups, grading deposits, paving fees, etc) is due at possession. You should budget 2-3% of the home value for closing cost. It's a big chunk (for us it was around $12K).

Keep in mind, if you aren't made of money and do all your upgrades through the builder (no not recommend!), if things like ugly lighting, white walls, ho-hum faucets, etc. bother you, you'll have a LOT of DIY project to do. I can't live in a white house so I painted our entire place (2700 sq') in the first month, by myself, lol. If you aren't upgrading up the wazoo, typically builder=basic.

[GinaM]

I was thinking the same thing VolgaOwner! We had to put down $40K within the first three months for the Fernbrook single we bought. Then there's the $10K plus at closing, and don't forget the land transfer tax in your closing costs if you are not a first time home buyer.