Buying new Home or older?

[wooohooo]

Hey everyone,

My wife and I are expecting a little one in a few months here and right now we're renting a house but are interested in buying a place. My wife wants to buy a new house (because... new) and it seems to be priced quite low but the location is a little far, there's little to no yard and it's a 0 lot line. The two builder's we're looking at is PaceSetter and brookfield homes.

The older homes are a better location, smaller, but huge yard but also more expensive.

This is also in Edmonton (not sure if it matters). Another last point is in ~5 years our hope is to be able to move back to Calgary - would it be more cost effective to rent? We have family as well in Edmonton so we are open to renting it out as well.

So the question remains - is it worth spending $40-50000 more for an older home (needs renovations) but is in a more convenient location and a huge yard? Or would you take the savings, and build a nice, newer home that takes an extra 10-15 minutes to get to work?

Lastly, has anyone heard much about PaceSetter or Brookfield Homes? Our realtor said he really likes to deal with them, but we have little to no experience with this.

Thanks

[trumpethead]

Originally Posted by wooohooo

Hey everyone,


This is also in Edmonton (not sure if it matters). Another last point is in ~5 years our hope is to be able to move back to Calgary - would it be more cost effective to rent? We have family as well in Edmonton so we are open to renting it out as well.

Thanks

oh, it matters.... and I am sure the good people of CP are about to tell you why.

[Nufy]

What are the tires like on these homes you are about to buy in Edmonton...

Mobility matters...

[wooohooo]

Originally Posted by trumpethead

oh, it matters.... and I am sure the good people of CP are about to tell you why.

Ohh I know.... I talked to landmark in Edmonton and they said they prefab everything in their warehouse vs Calgary where they build on site. So I thought maybe something is different with the two with those builders.

[Lubicon]

All joking aside Edmonton/Calgary it doesn't matter. Both cities are so similar in the housing market that they are virtually identical. at least in my opinion and I have lived in both.

New vs. 'used' - both have drawbacks and advantages as you have mentioned, and I have bought both types of homes as well so some experience in each case. For me if I was doign it again I would buy for convenience before anything else. Convenience to family and work mainly but also amenities. As you have mentioned, 10 minutes more commute (each way?) is 100 minutes every week or about 75 hours per year sitting in traffic when you could be sitting at home with new baby.

[rohara66]

If you are planning a move in 5-ish years then keep renting. If you buy you’ll have to sell and pay realtor fee’s in fairly short order.

7% on first $10k plus 3% for remaining amount. Not worth it.

[Red]

Since you are planning to move in a few years I'd get the old house.
People go to new neighbourhoods for new houses so you will always have to compete with that. Basically you will have to sell at a discount and it would be risky to count on a boom propping new build prices.
People that buy old buy because of other factors none of which are going to change anytime soon. Unless the city runs a highway through it that is.
And then there is the convenience of living closer to work etc.

My 2 cents.

[OMG!WTF!]

I'd rent. Ownership costs are more than you think. Building a new home sucks the big one. Renovating an older home usually takes cash not mortgage money. Generally older homes in inner city desirable areas hold more resale value. In general, I don't think you are going to miss a 2006ish boom in the next five years. Use you down payment to make money and lower your rent costs. Good luck!

[Torture]

If you're planning to move in 5 years it's probably best to rent.
Look up a rent vs buy calculator and plug in your numbers.


On old vs new - personally I'd go with the old home in a good location. You can always upgrade some of the features of an old home but you can't change the location of your home.

[Fuzz]

Is the new house the actual sale price, or does it not include things like GST? That can add a lot. New houses can also have added expenses, like fences and landscaping. If it were me I'd be on the border between old house and renting...

[tvp2003]

How are you with repairs and home maintenance?

Just my experience -- we bought a new townhouse as our "first home" and it was nice because we didn't have to worry about maintenance, etc. (being a townhouse) nor did we have to worry about repairs (as a new build).

We since moved into an older house (with a bigger yard, better location), which worked out well because now I have some basic tools and experience to deal with little maintenance and repair issues that old houses have.

Anything less than 5 years and I would suggest renting (especially given the current market); those realtor fees can eat up a lot of equity if the market stays flat. Do the math and see what you can stomach. Obviously this probably won't be your "forever house" so use the flexibility to your advantage if you can.

P.S. Congrats!

[Hockeyguy15]

Originally Posted by rohara66

If you are planning a move in 5-ish years then keep renting. If you buy you’ll have to sell and pay realtor fee’s in fairly short order.

7% on first $10k plus 3% for remaining amount. Not worth it.

I wish it was 7% on the first 10k, you meant 100k.

[bc-chris]

whooohooo... is this your first child?

this amazing thing called 'spare time' quickly evaporates with the emergence of a child.

my wife and i have 2 kids (our girl is 4 in a couple weeks and our boy is 1yr/7months). we often joke about all these people that told us before we had kids, 'oh... you won't even remember what life was like before kids!'

i call b.s. on that - it's a lie... total lie. we very much DO remember what life was like before kids... we had tons of spare time to go and do stuff... like dates, road trips, work around the house, yard work, play on sports teams as a couple, etc.

don't get me wrong, i love my kids and wouldn't trade them for anything, but they eat up every last bit of time you have!

buying an older house that requires renos and then lots of yard work is a big time commitment and your life is about to take a drastic change of direction (for the good... but no spare time!)

[Fuzz]

I guess it depends what "old home" means, too. How old? And it's upkeep. Does it need a roof, furnace, etc? Or mostly a coat of paint and be good for 5 years?

[Bill Bumface]

The one thing you can never get more of in life is time. Tell the longer commute to suck it and enjoy watching your kid grow up. Plus big trees rule.

Resale is based off land. Buildings depreciate, so financially old usually trumps new. Way more land value in the old place.

[Winsor_Pilates]

Originally Posted by rohara66

If you are planning a move in 5-ish years then keep renting. If you buy you’ll have to sell and pay realtor fee’s in fairly short order.

7% on first $10k plus 3% for remaining amount. Not worth it.

Not necessarily that simple.

Depends on rental rates in their area vs prices, rental vacancies, how much of their mortgage payments would be going towards equity/interest vs rent which is all gone, what they think the market will do over the next 5 years.

Every market is different, but property values can change considerably in 5 years.

[EVERLAST]

I've worked for both builders in a sub trade capacity and like neither builder.
New regardless of who builds it is typically disappointing for most people.
Been working in the industry for 32 years behind all trades and hear more horrible stories from new home owners than from any other group of people.....And I see deficiencies galore without people even telling me .

Buy older. If it's been maintained well you'll have less to worry about.

[Kjesse]

If you plan to move in 5 years, only buy if you think the value of your property will increase such to offset the costs of buying and selling, which mostly has to do with realtor fees and the general hassle of selling.

Compare that against the equity you would gain given the very low current interest rates and that you would be paying down your mortgage, which is money you keep.

With a newborn you don't need a back yard. Back yards start to matter at the 3, 4, 5 year mark.

[bagofpucks]

Both houses we've bought have been over 10 years old, so I can't comment on new builds directly, but a co-worker of mine is having brutal issues with a new build they've been in for 2 years. They had a major plumbing leak, somewhat serious finishing issues, and last month their furnace kicked the bucket. Now, they have said the builder has been good to deal with, but it seems to have been one issue after another.

Just food for thought that newer doesn't always mean less hassle.

[REDVAN]

We built with Pacesetter in Airdrie and are 90% satisfied after 2.5 years.

Any specific questions you have?