Selecting a Home
August 23, 2006
Selecting a Home Type
Often the selection of a first home is a chance event…
friends are selling their condo and will give you a great deal if you buy from them privately.
- you drop into a new home sales office and "fall in love" with a particular model, not to mention the charming sales pitch of the well-practiced salesperson.
- your realtor comes across the perfect little semi…and suggests you snap it up quickly "before someone else does".
The point is…there are a lot of selling forces out there…you should assert your right to evaluate the options yourself, and then make an informed choice. To assist in this evaluation process, following is a comparison of some of the Pro’s and Con’s of the different choices.
| |
| |
Condo Apartment |
| PRO |
- Lowest purchase price.
- Lowest taxes.
- Lowest maintenance effort - no snow shoveling or lawn mowing.
- Greatest convenience for singles, and empty-nesters. (no children at home)
|
| CON |
- Hardest to re-sell.
- Sometimes difficult to finance with low down payment.
- Maintenance fees usually increase the carrying costs substantially.
- No private yard - can’t barbecue, etc.
- Share common walls with neighbours.
|
| |
| |
Condo/Freehold Townhouse |
| PRO |
- Lower purchase price than semi or detached.
- Lower taxes.
- Lower maintenance effort.
- Better re-sale market than condo apartment.
- Some important backyard activities possible…barbecues, sandbox, swings.
|
| CON |
- Hardest to re-sell.
- Usually harder to re-sell than semi or detached home. (depends on market)
- Usually not as much value appreciation as semi or detached.
- Don’t own the land. (unless freehold Townhouse)
- Shared wall(s) and close to neighbours - acceptable as long as neighbours are good.
|
| |
| |
Semi-Detached |
| PRO |
- Good compromise for first time buyer…most privacy at the least cost.
- You own the land - which is the appreciating asset…bricks and mortar depreciate.
- Readily re-sold to other first-time buyers - therefore good value appreciation.
- Easy to finance at best rates.
- Many family and entertainment activities possible - yard usually bigger than a Townhouse.
|
| CON |
- A common wall - acceptable if neighbours are good, but no control over changes.
- A higher price per square foot of living space than a townhouse in a similar location.
|
| |
| |
Detached |
| PRO |
- You own the land - the appreciating asset. Value appreciation is usually best for detached because the greatest number of buyers "aspire" to a detached property.
- No common walls, allowing the greatest privacy.
- The most prestigious - you are seen as having "made it" by friends and family.
- Lower priced detached homes tend to sell quickly because of the combination of prestige and affordability.
|
| CON |
- The cost is the highest of all options - both purchase price and property taxes - for similar locations and quality.
|
| |
| Summary |
| ISSUE |
CONDO APT |
CONDO |
SEMI-DETACHED |
DETACHED |
| Purchase Price |
Lowest |
Low |
Medium |
Highest |
| Taxes |
Lowest |
Low |
Medium |
Highest |
Maintenance Effort
Required |
Lowest |
Low |
Medium |
Highest |
| Maintenance Cost |
High |
High |
Lowest |
Medium |
| Re-Sale Market |
Worst |
Limited |
Best |
Good |
Financing-Low
Down payment |
Worst |
Good |
Excellent |
Excellent |
Family/Entertainment
Activities (BBQ etc.) |
Poor |
Good |
Very Good |
Excellent |
| Value Appreciation |
Poor |
Medium |
Medium |
Best |
| |
| |
Re-Sale Home (vs. New from Builder) |
| PRO |
- Price is lower because of some wear and tear. (which varies greatly - check closely!)
- You get the benefit of upgrades (finished basement, pool etc.) at a depreciated price.
- Established neighbourhood..current neighbours/ other variables are a known quantity.
|
| CON |
- The home has been used by others.
- There is no "warranty" for major repairs required by law, although it can be specifically arranged.
- You often inherit someone else’s taste in decorating, which can be expensive and time consuming to change at retail prices.
|
| |
| |
New Home from Builder (vs. Resale) |
| PRO |
- You are the first occupants…the house is an empty canvas for you to add your touch.
- Priced lower than new homes in similar recently completed subdivisions…appreciates as soon as construction is 100% complete.
- You can choose colours, design features to your own taste as an inclusion in the purchase price, with upgrades negotiable.
- There is usually excellent protection from defects in construction required by Provincial Law.
|
| CON |
- There is often an extended period of time without lawns or paved driveways, and with dust from unsodded areas and construction traffic.
- There can be problems with permits or trade strikes that prevent timely completion and occupancy.
- Some closing costs apply to new homes that do not exist with resales.
|
Comments