The question many homebuyers ask is whether they should get a newly constructed building or a resale property. Today we're digging into buyers who are seeking a new build home for sale in Calgary.
Buying a new house can be quite the experience for home buyers and is often described by many of our buyers early on as "nerve-racking". You want the best, you want to work with a trusted builder, and you want a good deal as well, right?
Below are a few things you should know when purchasing new construction in Calgary, there are both advantages and disadvantages of buying new homes and we unwrap these in detail below starting with the benefits.
Advantages of buying a newly constructed home
Customization is almost always on the menu!
For the most part, if the home hasn't been constructed, you will be able to have a consultation with the builders sales representative with your ideas and any customizations or upgrades that you're interested in exploring. This can include everything from appliances or flooring, to backsplash or and finished basements, there are really a number of things to consider all
Without the help of some sweat equity by yourself, or the assistance of a contractor once you've taken possession, these options are not available when you buy an existing home. The other challenge is cash on hand, it's an easier process for a Calgary home buyer to obtain a mortgage for $500,000 to fund their new build VS obtaining a mortgage for $450,000 on an existing home and renovating it for $50,000. While there are options to have part of your purchase (plus improvements) financed, the process is more tedious (outside of living in / through a renovation and can include appraisals, quote approvals, more paperwork etc.
Don’t require restorations or renovations | Under warranty When you buy a resale home that has been lived in, you may need to do some repairs. Depending on the homes age and condition this could range from minor jobs like updating the lighting to major systems in your including the plumbing, electrical, or HVAC systems. Often times after purchasing our buyers let us know that they intend to invest a bit more into homes, minor flooring upgrades / changes, modifying the counter tops, paint, etc are all potential repairs that could be necessary on a resale home.
Expenses on maintenance are lower
Recently constructed homes should require less maintenance. Everything from new appliances, to major internal systems like electrical, plumbing and HVAC are new. If they have been installed correctly, you should not have any problems with them for many years to come, and have peace of mind knowing that if any problems arise, they could be covered under the Alberta New Home Warranty program.
Old homes, on the other hand, may require repairs. You might even need to replace the appliances, or other outdated components in the home.
Less expenditure on utility bills is also a benefit of newer homes, with more efficient furnaces, newer windows, and what should be better insulated all are important aspects to a new home that help keep your utility bills lower. These days, Calgary Home builders are constructing more houses that are eco-friendly.
Other advantages when purchasing a new build can include
You're less likely to enter multiple offer scenarios.
Very little risk of easements of caveats on title that may affect your purchase and RPRs should be current.
Disadvantages of buying a newly constructed home
New homes often cost a lot more than old homes
Though you might not spend anything on renovations, new home builds aren't exactly cheap, all the benefits outlined above come at a cost, and with rising construction costs builders attempt to find a balance of quality and workmanship that works out for both the buyer and the builder. Inner city homes are typically the exception (due to their limited inventory and location) however, you'll likely spend a less buying an old property than purchasing one that has been recently constructed.
When you are shopping older homes, you will often find that they have so much more character, builders focused on the design and detailing while working on these houses. However, newer properties can sometimes lack this charm. Most of the time, developers focus on functions and utilities rather than style and aesthetic appeal. You'll often hear the term 'cookie cutter' thrown around when discussing new builds, this is a term to reflect the similar stylings / layouts / offerings seen throughout new build communities as the developers often only work with a handful of builders, who in turn usually only offer a limited number of layouts for their builds.
Other drawbacks when purchasing a new build can include
GST$ is a cost you'll carry in purchasing a newly built home yourself.
Newer communities especially in their earlier development stages will most likely not have amenities like schools, public transit routes, hospitals, malls, and grocery stores nearby. They take time to develop, the charm of a mature tree lined street won't be seen or felt in many new communities for quite some time.
In communities like Auburn Bay you'll find a similar look throughout, while this cottage styled theme housing can appeal to some, others may be off put by the singular look seen throughout the south east lake community.
Upgrades can often be marked up, putting buyers in a jam where they may want something like granite countertops but the builder could be 1.5x - 2x more expensive.
Some builders can see major delays, we've seen this recently in the custom build market especially when demand is high, buyers could plan a move in well in advance and still end up not obtaining their desired possession.
Oversupply can become a real issue, the condominium market in Calgary struggles with this and as more and more developments are built, demand lowers, and price begins to decline as a buyers market forms or persists.
Less or no opportunity for subdivision.
Zero lot lines, smaller lots, and privacy are always a concern for home owners when citing their reasons for not wanting to look at new home builds.
DIY'ers and contractors aren't going to be able to put in their own sweat equity that could help them build equity and increase their overall equity position.
We've seen a lot of new home buyers purchasing custom home builds in new communities forced to sell (for various reasons) that take major hits from their purchase price. They're constantly competing with the newest developments in the area and often see far more volatile market fluctuations from this.
Final thoughts on purchasing a new construction home in Calgary
There are so many things you would need to consider before buying a new home. They will always have their advantages and disadvantages. Think of what you are getting yourself into before making huge investments.
Newer homes are efficient and will give you more options. However, if you are not careful, you will get a property in an area that could not develop into what you're truly looking for or needing.
Before you make this choice, book an appointment with one of our talented Calgary REALTORS® we can address the intricacies and nuances of newly constructed homes and communities they're in.