Buying a newly built home or a previously owned property is about more than comparing two prices. You also need to consider the timeline, any work the property may need, costs that may not be included in the asking price, and the kind of community you want to live in.
As a residential real estate broker, I recommend looking at the whole picture: the land, the home, any extras, your commute and how the neighbourhood may develop.
Building: Finding a Lot and Choosing Your Timeline
In many areas, vacant lots are in short supply. Some municipalities do offer new lots as development projects move forward. Conditions vary: a lot may come with a deadline to build, or requirements about the type of home, the plans or the contractor.
Before making an offer, check with the municipality to confirm that the lot is suitable for your plans. Zoning, setback requirements, natural constraints and permits can affect the size or design of the home you can build. The Government of Québec explains zoning rules and conditions that may apply to construction permits.
Buy the Lot Now and Build Later
This option may let you secure a location you like and postpone construction. However, check for any building deadlines set by the seller or municipality, and budget for the costs of holding the lot, such as municipal taxes, interest if you finance the purchase and professional fees.
It is also useful to confirm which services are already available—water, sewer and electricity—and what site preparation or connection work remains to be done. A lot may appear ready to build on even though some preparation costs are still outstanding.
Buy a Lot and a Home Off Plan
Buying off plan can allow you to choose some finishes and options and get a newly built home without managing every stage of construction yourself. However, make sure you understand exactly what the contract covers: materials, dimensions, inclusions and exclusions, the schedule, how upgrades are priced and what happens if there are delays.
In Québec, when you buy a new residential property from a builder or developer to live in, the transaction uses a preliminary contract. Review the plans and specifications, applicable warranties and payment terms before committing. The OACIQ outlines the steps and documents involved in buying a new or off-plan property.
A Neighbourhood That May Be Under Construction for Years
A new development may offer a recently built home and modern infrastructure, but construction in the neighbourhood can continue for some time as new streets, homes and services are added in phases.
Before buying, ask about the planned phases, the lots still to be built on and any available timelines. Consider the potential effects on traffic, noise, dust and access to services while construction is underway.
Costs to Add to the Price of a New Home
The advertised price does not always reflect the full cost of moving in. Depending on the contract and the lot, you may need to budget for:
- applicable taxes and transaction costs;
- notary and financing fees;
- utility connections or site preparation;
- upgrades, materials and changes beyond the standard inclusions;
- grading, levelling, lawn, trees, fencing or paving;
- window coverings, light fixtures, appliances and other items that may not be included.
Landscaping is an important detail to confirm. The lot may be graded and seeded, or it may not come with completed landscaping. Ask for a written description of what is included and when any seasonal work will be completed. Written contract terms are clearer than a verbal promise.
Also check whether the construction is registered under the applicable new home warranty plan. The OACIQ recommends checking the contractor’s accreditation and the property’s registration in the warranty plan. See the OACIQ’s guidance on new construction.
Buying an Existing Home: Advantages and Things to Consider
With an existing home, you can often see exactly what you are buying: the home’s condition, the size of the yard, the immediate surroundings and the established neighbourhood. Depending on the terms of the transaction, you may also be able to move in sooner.
Other advantages may include mature trees, an existing fence, a finished basement or proximity to schools and shops. Depending on the market and the property, an existing home may offer a good balance of location, size and price.
However, the age and maintenance history of the building matter. The roof, windows, plumbing, heating system or foundation may need work now or in the future. A pre-purchase inspection can help you understand the property’s condition, but you should still set aside a realistic budget for maintenance and renovations.
When comparing options, think about the work you are willing and able to take on. Updating a kitchen may be a predictable project; a major building issue can bring larger expenses and delays.
Compare the Costs Over Several Years
A new home is not automatically less expensive over time, and an existing home is not automatically a bargain. For either option, compare the total cost: purchase price, transaction fees, immediate work, taxes, financing and expected maintenance.
With new construction, upgrades and landscaping can increase the budget. With an existing home, renovations and equipment replacement can have the same effect. The key is to ask for details and set aside a contingency for unexpected expenses.
A Couple Who Changed Their Plans
Consider a couple—this is a fictional example based on situations that can arise—who bought a newly built home in a new development. At the time, the home met their needs: it was recent, required little immediate work and had spaces they could choose to suit their preferences.
Over the next few years, however, they saw the neighbourhood continue to develop and their needs change. After three or four years, they decided to move to the neighbouring municipality and bought an existing home in an established neighbourhood.
That does not mean buying new was a mistake. It shows that a real estate decision also depends on your lifestyle and circumstances at the time. A few years later, the couple placed more value on an established neighbourhood and on different features than they had initially sought.
Selling after only a few years comes with costs and should be considered in advance. Before buying, think about how long you expect to stay and how readily you might be able to resell the property.
So, Should You Build or Buy?
Building or buying new may suit people who want a recently built home, are comfortable with a construction timeline and have checked the cost of upgrades and outdoor work.
An existing home may be a better fit for people who value an established neighbourhood, want to move sooner or are willing to take on some work to get the location or type of property they want.
Either way, the best decision starts with a complete budget and a clear understanding of the purchase conditions. Before committing, check the contract inclusions, municipal requirements, the condition of the building or lot and the expenses you may face after taking possession.
Are you unsure whether to build or buy an existing home? Get in touch with me. I can help you compare your options based on your budget, needs and preferred area so you can make an informed decision.
This article offers general information. Inclusions, warranties, timelines and municipal requirements vary by project and contract. For a specific transaction, review the applicable documents and consult the relevant professionals.
