Buy Brand New or a Re-Sale?


What are the differences between buying a brand new home or a re-sale one? There are alot of factors to take in consideration besides the age. Yes, it is very nice to own a property that no one has lived in before, but there are downsides to buying new as well. Here is a list of pros & cons associated with each. Be informed and make the best decidion!

Brand New - The Pros


1) Personalized Choices

When purchasing a brand new home, you may be able to upgrade or choose certain items such as siding, flooring, cabinets, plumbing and electrical fixtures and have these installed for you prior to taking possession.

2) Latest Codes & Standards

With any new construction the latest building codes, electrical and energy-efficiency standards will be applied. You can feel safe knowing that you are getting a product with the most recent safety standards.

3) Low Maintenance Costs & Open Bylaws

Since the building is brand new, you will general find lower monthly maintenance costs in strata properties. The building will fall under the required warranty coverage so there is not a need to have a large contingency fund at this stage. You will also find the most open bylaws with new construction. As time goes on and problems arise restrictions on pets and rentals are usually imposed.

4) Builder Warranty

In British Columbia, builders must be licensed by the Homeowner Protection Office and arrange for third-party home warranty insurance. As a minimum, homes built by Licensed Residential Builders must have the
2-5-10 Year Home Warranty Insurance - the strongest construction defect insurance in Canada. Some new homes have warranty insurance coverage that exceeds the minimum requirement.


Brand New - The Cons


1) Price is Non-Negotiable


When you are buying directly from the Developer the asking price for strata properties is generally firm and there is no room for negotiation. The only negotiable items when buying brand new units are usually the extra items, such as storgae lockers and parking stalls, or the deposit structure, but even this is not guaranteed. The purchase price, for the most part, is set in stone.


2) Sales Tax Applicable


GST/PST sales tax applies to all brand new construction. This means that when you purchase a brand new home you must pay the 5% GST and 2% Transitional Tax or PST on top of the purchase price. There are some government rebates that a purchaser may be eligible for as a first time home buyer buying a property under $450,000, but the sales tax must still be paid upfront at closing and rebates (if eligible) will only be for a portion of the tax amount.


Some sales centres for new construction homes will include the NET sales tax within the purchase price. This means that they are including the tax amount payable AFTER eligible rebates. In return, you must assign your rebates to the developer at the time of purchase.


For more information about the GST New Housing Rebate program, visit the Canada Revenue Agency website at,


3) Extra Costs


Don't be fooled by the show suites - these units usually have all "extra upgades" that are not included in the purchase price, which can add up to be anywhere from an extra $20,000 on top of the purchase price! So if you want to add the shelving units, fancy appliances, and crown moulding you see in the show suite, you better be ready to pay for them!


4) Buying from a Floor-Plan


When you are purchasing a pre-sale, you are making the decision to buy a unit largely based upon the building model and floor-plan. You do not actually SEE the home that you are buying. Athough you may be using the show suite as a guideline, the end result may come out quite differently than you were anticipating. In addition, the contract of purchase and sale prepared by the Developer usually contains a variance clause, allowing the final unit to vary by a specified degree from the original floorplan. This means that in the end there could be a wall where there was none before, or that the square footage may be slightly different than the original plan. Unless you can see the actual unit, you do not really know exacly what you are buying.


5) Things can Change

Issues can arise during construction and dates can be post-poned, or even moved earlier! The contract of purchase and sale prepared by the Developer usually contains a clause allowing the Developer to push or pull the dates a certain number of times upon giving notice to all purchasers. So when you think the Completion Date will be next May, it may end up being next winter and there is nothing you can do about it.


6) Developer's Contract of Purchase & Sale

Pre-sales do not use the same standard contracts that are used when purchasing re-sale homes. Rather, pre-sales have a contract of purchase and sale that has been drafted specifically for the Developer. This means that there are extra clauses inserted that allow the Developer to extend dates, etc. These contracts are much more lengthy than standard contracts and they must be read in full so that you know exactly what you are getting into. In addition, the sales representatives at the presentation center, like the contract, are working for the Developer. If you do plan to buy a pre-sale unit, bring in an outside Realtor to examine the contract and best represent you.

Re Sales - The Pros

1) Price is Negotiable

Unlike pre-sale units, the final purchase price for re-sale properties is almost always less than what the Seller is initially asking (unless a hot market with multiple offer situations). With the guidance of a Realtor, you can negotiatie the purchase price by any amount, depending on the current market situation and the motivation of the Seller, and you have the potential to get the property for anywhere from $2,000 to $100,000 less than asking!

2) No Sales Tax

Unlike brand new homes, you don't have to pay GST or PST on re-sales, as this sales tax is only paid once when a property is purchased for the very first time.

3) What You See is What You Get

You are not buying a property based upon a floorplan or building model and there is no "variance clause" allowing the final product to come out differently. What you see is what you get! 

4) Your Contract of Purchase & Sale

Re-sales use a standard contract of purchase & sale that is drafted, with the guidance of your Realtor, to fully represent you. You can ask for anything you want in this contract and anything can be negotiaited with the Seller. You are not using a contract of purchase & sales that has been specifically drafted to represent the Developer's interests.

5) Established Neighbourhoods & Amenities

Newly developed areas may take years to establish the proposed schdools, shopping malls and services, but these will all be in existence in previously developed areas.


Re Sales - The Cons


1) Warranty Coverage


The older a building gets, the less warranty coverage it has. After 10 years you fall out of the builder's 2-5-10 warranty coverage and it becomes increasingly important to have a healthy contingency reserve fund for strata properties. Detached homes will also fall out of this coverage after 10 years, at that point any major repairs will be at the cost of the owner.


2) May need Updating or Repairs


Before purchasing a re-sale home it is very important to examine whether any major repairs are needed, as these can ultimately cost you money. Make your offer subject to a professional inspection in order to fully evaluate whether the previous owner has kept the home well maintained, or whether you will need to make major repairs. If big repairs are needed, this should ultimatley be reflected in the negotiated purchase price.


3) Higher Maintenance Fees

As strata properties age, maintenance fees go up in anticipation, or need, of upcoming repairs. A well-prepared strata will have a repair plan and budget that keeps on top of all maintenance so that strata fees are kept in moderation while building repairs are carried out. This is why it is important to write an offer subject to review all strata documents in order to determine the competency of the strata council.


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