New vs. Resale

New Home

·         Modern design. A new home has an up-to-date design that takes into account the latest trends, materials and features.

·         Personalized choices. You may be able to upgrade or choose certain items such as siding, flooring, cabinets, plumbing and electrical fixtures.

·         Up-to-date with the latest codes/standards. The latest building codes, electrical and energy-efficiency standards will be applied.

·         Maintenance costs. Lower maintenance costs and many items are covered by a new home warranty. You should still set aside money every year for future maintenance costs.

·         Builder warranty. This is a warranty that may be provided by the builder of the home. Be sure to check all the conditions of the warranty. A homebuilder’s warranty can be important if a major system such as plumbing or heating breaks down.

·         New Home Warranty programs. Generally new home warranty programs are provided by provincial and territorial governments, but there are private new home warranty programs. These warranty programs are not available in Nunavut and the Northwest Territories. Check with your real estate agent or lawyer/notary to find out what the new home warranty program in your province or territory covers. In Ontario Tarion administers the program.

·         Neighbourhood amenities such as schools, shopping malls and other services may not be complete for years.

·         Taxes such as the Goods and Services Tax (GST) (or, in certain provinces, the Harmonized Sales Tax (HST)) may apply or may be included in the contract. However, you may qualify for a rebate of part of the GST or HST on homes that cost less than $450,000. For more information about the GST New Housing Rebate program, visit the Canada Revenue Agency website at, http://www.cra-arc.gc.ca.

·         Extra costs. You may have to pay extra if you want to add a fireplace, plant trees and sod, or pave your driveway. Make sure you know exactly what's included in the price of your home.

·         Builders Reputations. It’s fairly easy to research the builder on the web. After all you want to ensure they will still be in business later on and that your deposit is not at risk.

·         Rent Risk. If the new condominium that you are buying is ready in time for you to move in but the legal documents are not ready, or the building has not yet completed final inspection, you could be forced to pay rent from the time you move in until the building officially closes.

·         Mortgage Discount. Sometimes the builder will enter into an arrangement with a lender to subsidize the interest rate and/or provide a mortgage specialist at the sales center who can lock in the interest rate and get you pre-approved for more than 120 days. Sometimes the builder will contract with the mortgage agent and/or lender for a percentage of the mortgage commission.

Resale Home

·         Quicker Closes. Resale homes generally close within 3 months.

·         You can see what you are buying. Easy access to services. Probably established in a neighbourhood with schools, shopping malls and other services.

·         Landscaping is usually done and fencing installed. Previously owned homes may have extras like fireplaces, or finished basements or swimming pools.

·         No GST/HST. You don't have to pay the GST/HST unless the house has been renovated substantially, and then the taxes are applied as if it were a new house.

·         Possible redecorating and renovations. You may need to redecorate, renovate or do major repairs such as replacing the roof, windows and doors. A fixer upper, although cheaper than a similar home may eat up your capital and time with repairs.

Condominium

A condominium is a type of shared ownership where the people jointly own the land and common areas and have a shared right to use those areas. They also have exclusive right to the area known as the owner’s living space. In Ontario condominiums are governed by the Condominium Act, 1998 with the condominium establishing a corporation to deal with maintenance, repairs, etc. A board of directors is elected by the owners of units and an annual general meeting is held to deal with board elections and other matters.

·         Amenities. Some condominiums have shared amenities like work outs rooms, pools, wood shops, party rooms, etc. These are paid for and used by all the owners of the condominium.

·         Shared upkeep. The owner, while being responsible for repairs inside his unit, shares the costs of upkeep on the roof, grass and gardens, outside walls, garage and amenities with the other owners.

·         Insurance. The condominium corporation jointly purchases fire and replacement insurance for the building or group of buildings. Each unit is responsible for their own contents (theft) insurance.

·         Assessments. If the condominium management is forced to deplete the reserve fund due to an emergency or unplanned repair or mismanagement the current owners may be required to “top up” the reserve fund with a lump sum payment. This can be a problem for new owners on a tight budget. In one case, in Milton, the property manager stole $300,000 of the reserve fund and the current owners will need to cover that if the funds are unrecoverable.

·         Floods and Repairs. The condominium corporation can access your unit to conduct emergency repairs, perform maintenance, etc. If you have a flood and damage the unit below you, you may be responsible for replacing their contents.

·         Maintenance Fees. It is common for the condominium corporation to charge a monthly fee for insurance, upkeep, common amenities, utilities, satellite, etc. Check before you purchase what expenses are included because maintenance fees can vary greatly from building to building. The resale value of some condominiums can be affected by unusually high maintenance fees compared to other condos in the same area.