Why Buy New?

By Marcia Luke

You've decided that it's time to make the move to home ownership. You want to keep your options open and buy the home that's right for you. There are already so many decisions to make: location, size, mortgage broker, real estate agent. How do you decide whether to buy new or resale? This one decision could narrow down your search immensely, but what's the difference? There are many reasons and not all of them are superficial. New homes aside from being nice to look at and never having been lived in - offer many benefits to you as a homeowner.

Some point out that the new home warranty offered by the Tarion Warranty Corporation is the biggest benefit of buying new, and they could be right. The warranty, offered on all new homes, provides protection in stages of one, two, and seven years. The warranty covers categories such as deposit protection, protection against delayed closings or occupancies without proper notice, defects in work and materials, major structural defects, and sometimes even unauthorized substitutions. This and other information about Tarion can be found at www.tarion.com.

While that's a very convincing argument in itself, first-time buyers might tell you that the best thing about buying new is the option of using their previously saved RRSP toward their down payment. This option, called the Home Buyers Plan, is essentially a temporary loan to yourself that you have to pay back into your RRSP in equal amounts over 15 years. The nice part is that the money remains tax-free as long as you pay it back. That means that your down payment, up to $40,000 per couple, could be tax-free! This is a great benefit, especially when you're struggling to save for that first home.

What's more, there's the benefit of insurance breaks to add to the list. Insurance breaks? Yes, they do exist. Though brokers or agents might not call it a discount, when they ask questions about your home's age and its qualities, essentially they're assessing your home?s risk factor. If your home is new, it has a lesser chance of being broken into as a result of better security or of burning down because of new materials and innovations. And there are other low-risk factors that your insurance company takes into account when determining your premium. Although it doesn't show up on your policy as a break or discount, you're certainly doing yourself a favour by buying new.

During this time of environmental awareness and efficiency, you can know that your home is up to par by checking its EnerGuide for new homes rating. This rating will tell you exactly how efficient your home is at heating, air ventilation, preventing air from escaping through windows and doors, and keeping your water hot among other things. An energy-efficient home not only makes you feel better about your contribution to the environment, but it also saves you money. What could be better than that?

That's not to say that nice-looking, never-lived-in homes aren't benefits themselves. Christine Gilbert, an editor in Whitby, explains that the reason she and her husband chose to buy their new home in Oshawa was simply to be able to choose everything from scratch. "I really wanted to pick my own colours for things like tiles and carpet and didn't want to deal with someone else's tastes," Gilbert explains. Though she found it a little overwhelming, she says that picking what she wanted was the major draw in buying new. Even now, after having settled in, she still considers it to be the biggest new home benefit.

Laura Chapman, contributor to the NDHC New Dreamhome Diary and senior accounting clerk in Mississauga, agrees. She and her fiancé recently moved into their new house in Milton. Chapman says, "I like the idea that no one has lived in our house before. We wanted to make our own choices." She continues, "you get to watch your house being built from the ground up, so you know everything about your house. For example, you choose the placement of your outlets. It's the little things; you get to put your personality into it and we just know that it's ours."

And if you need yet another reason to buy new, here it is: new developments offer a wide array of options. Condominiums, lofts, townhomes, live/work arrangements, semi-detached, and fully-detached all exist in a variety of locations and neighbourhoods thanks to the booming residential spaces of the Greater Toronto Area. You can find whatever you're looking for, at whatever price and size, wherever you want because builders are meeting the needs of many different lifestyle options. Your choices couldn't be more abundant!

New Homebuyer's Checklist:

Searching for a new home? Here's a handy checklist to take with you on your search as a reminder of things you should ask yourself, your builder, and friends and family. With all this information, you'll be sure to make the right choice!

Ask about your builder's customer service record and their Tarion Warranty Corporation history

Find out the builder's contact info and the location of the sales office for the development you're interested in

Make a list of options and upgrades to choose from

Get referrals for mortgage brokers and real estate agents

Map out neighbourhood amenities such as work, gym, school, grocery store, etc.

Measure commuting distance and time

Research property tax rates or condominium fees

Obtain a home insurance estimate

Get pre-approval for a mortgage

Verify closing dates and the anticipated schedule of development

Hire a lawyer to look over your papers and handle closing

Note the starting price and cost of upgrades that you want

Make notes for yourself about the total square footage, lot size, number of bedrooms, baths, etc.

Find out if appliances are included and what type of heating is used

Make notes on the exterior features: garage, parking, balcony, yard, etc.