Prebuilt house Issues
As discussed in my previous artricles, prebuilt homes appreciate faster than
used homes. However, there are things that you need to be aware to realize the
risk.
This happens
and this should be your the number one unforseeable concern. When the builder gooes bankrupt all your down payment is lost.
It had happened in Vancouver and it happens in Toronto. This is the risk for
purchasing a prebuilt house and there will be no signs until it is too late. You
simply have to be careful with the builder you selected.
It is part of a builder's profit strategy. First make the basic purchasing
price of the house relatively fair, then add masive cost to make additional
adjustments to the house. Most times, buyers will pay more thatn what is in
contract becasue the basic house is not enough. Buyers would often want to make
changes to the material used, customize certain room structures and select
particular bathroom styles.
Although you should be aware the house is empty, the cost to add these
additional items is still worth the price of buying a prebuilt house. Adding
pavement to the driveway should be around $2000. Applicances can be anywhere
from $1000 to $3000 or more depending on your selection. The basement doesn't
really have to be finished and can cost much less than buying a used home with a
finished basement.
New homes must have a warranty by law. However, the material may just be
designed to last long enough to meet the warranty, but not any logner. With used
homes, if the hosue can last 30 years without any issue and is still sturdy, than
the chances of it lasting another 30 without issue is high.
New homes have higher property because the material is new and is expected to
last longer. Whether that is true, is questionable. But having to pay the higher
property is always the case.
New homes today are often closed together and smaller. The material appears
thinner, but whether it wil last longer depends on the quality of the material.
You would have to be willing to pay a higher price for the same size as a used
home.
The risk factor in new homes is that you do know what is going into building the
house until it is done. It will most likely meet the province's minimum home
builder's inspection guideliness, but that is about it.
With used homes, you can inspect and verify it meet whether the builder has done
a high quality job.
Now the gains are known, so I wil just keep it simple and in point form format
*Less repair issues.
*No need to worry about dishonest real estate agents.
*house
has a warranty by law.
*higher return on
investment
If you choose the route of buying a new home, knowing the builder's reputation
and referral is most important. You can conduct research on the builder and make sure
the builder's past property has been of high quality.
If you have any questions or concerns about these articles or you would like to comment
on them, please post them.
Sep. 23, 2011
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