It was old-style marketing that caught the attention of Michael Bonanno and his wife Melissa Komadina. “We were driving along the QEW one day in late April and saw a road sign for New Horizon Development Group’s Waterfront Trails in the Fruitland/QEW area. We were just starting to think about buying a home and had looked at a few resales, but there was nothing concrete yet. But we saw the sign and immediately drove to the sales office to have a look, then came home and did our research.”

Sometimes it can be the smallest detail that either hooks a prospective homebuyer or drives them away. An acquaintance’s negative experience can have the impact of an atom bomb, while one great website can completely draw you in.  

For some, the most positive new-home attributes never even enter into the equation. Ontario Home Builder interviewed five resale purchasers and asked if they knew that a new home could save them 15% on annual energy charges versus one built just five years ago and 25-30% on homes built in 2005. Only one had any inkling of those statistics. Neither were they aware of the notably higher indoor air quality and home safety, thanks to updated building codes. Further, each of the five cited concerns over the quality of new homes as a dissuading factor from purchasing a new build. 

The comments suggest areas in which new-home builders can make public relations forays if they are to dispel fears and encourage more prospective buyers to consider their latest residential developments, instead of looking purely at resales for their next home. Every business, of course, has its critics, but it’s the response to that critique that can make a huge impression on consumers. Right or wrong, the following represents perceptions that were consistently held by those interviewed.

As for purchasers of new builds, there were some of the expected attractions, but also a few surprises. (Some last names have been omitted by request.)

BUYING NEW

The value of time was a common theme among the purchasers interviewed. “The most important factor was probably location. But we really liked the idea of not feeling rushed, as our townhome would not be ready for another six to eight months,” says Bonanno. “Plus, we figured that by the time we officially take possession, the house value will likely have increased 8%-12%.”

“The extended time period to close the project allowed for more flexibility in financing,” says Vincent Valeri, who purchased a condominium at the Molinaro Group’s new Paradigm project in Burlington.

“The time in advance of the move has allowed us to save for furnishings and submit a bigger down payment,” says Paul McKinlay, who has purchased in Tiffany Park Homes’ Westhaven project in Etobicoke. “There is near zero inventory of entry-level homes sub-$1million in the area other than this project, and everything in that category needed $100,000 or more of reno work. Buying new means there won’t have to be a big capital outlay for renovations after we move in.”

“We just don’t have the contacts, time or, frankly, the patience for renovations,” echoes Sandra (last name withheld), who purchased a Mattamy Cranberry Hill home in Waterdown. “Buying new allowed us to pick exactly what we wanted in terms of layout and finishings—something that would be complete when we moved in. Also, we watch a lot of HGTV, and seeing all the problems that can be found in existing homes is worrisome. That doesn’t mean that a new build can’t have problems, but at least you have the builder and warranties to cover you.” 

THE PRICE IS RIGHT

Half the new-home buyers interviewed also cited affordability as a big draw, particularly given current demand for resales in many areas. 

“By not choosing resale we didn’t have to go through the process of searching, open houses and bidding on homes in what is now a very competitive market,” says Amanda, who is awaiting a new build in Ancaster at Carriage Gate’s Legacy development.

“We went and saw numerous (resales),” says Bonanno. “People were paying list or over list price within 48 hours of it going up for sale. A resale of an eight-year-old home with less square footage and no appliances was going for $302,000, while ours will be about $312,500 after tax—and New Horizon included five brand new GE stainless steel appliances, plus several upgrades.”

MAKING INITIAL CONTACT

All points of marketing contact were equally effective for the group interviewed by OHB, with one saying the billboard initially caught their eye (New Horizon), one physically seeing the development take shape near their neighbourhood (Carriage Gate), another citing the sales office as drawing them in (Westhaven), two attributing word of mouth among the top two factors (Molinaro Group and Fieldgate Homes) and others noting web searches, print media and the builder’s website (Mattamy).

“The Molinaro Group is part of my (business) network, and I loved the first (new-build) condo I purchased in 2008—Molinaro’s Strata in Burlington,” says Valeri. “Also important were the location of Paradigm versus existing buildings, the amenities and quality of the new build, the (commitment) from the area to support the new project, as well as the resale value of the new build, as opposed to an older resale.”

The latter was another point of critical importance for most new-build buyers, including Brenda. “The opportunity to make money down the road was key,” she says. “We wanted to earn that profit rather than paying a higher price for the home and giving it to someone else.”

“I do see it as an investment,” admits Darryl, who purchased in Fieldgate Homes’ Valleylands development in Brampton. “We bought new because we only plan on living here for a few years before moving out west, and didn’t want to run into any major expenses in the interim. It’s a very attractive neighbourhood, and we like the brick and stone and the fact that all the homes don’t look alike. It’s also conveniently located to a lot of facilities and highways—especially when coming home from work on the 407.”

Amanda also loved the area for their Ancaster purchase, as well as the chance to design their home from scratch. But the experience thus far, she concedes, has been stressful. “Our house is not going to be ready when first promised, due to issues with the city and building permits,” she notes. “So now we will, for a few months, have to live in temporary accommodations, store our belongings—doubling our moving expenses. And our daily routine when our kids return to school will be more arduous. The builder has a good reputation and we expect the house will be well built. However, the uncertainty and added complications we’ve had could dissuade us from buying new again in the future.”  

RESALE

In some cases, new-home builders simply can’t compete. Being a car buff, Kristine Danton was looking for a lot of room to breathe. “We chose resale over new due to the fact that virtually all new homes in our price range came with little to no property,” notes Danton. “We bought in Windham Centre, southwest of Brantford. We work in Hamilton and love the city, but could not justify the prices there. For $190,000 we got an 1,800 sq. ft. farmhouse, which we use as a 10-car shop.”“We wanted a large yard with old trees and privacy,” adds Valerie (last name withheld), who purchased her resale in the Oakville’s Bronte area. “We looked into buying new again, but the largest lots offered were 50 feet across and only 89 feet deep. When you put a massive home on a tiny lot, you are left with no space and privacy. So we decided to buy old and get the lot. It was also walking distance to stores and schools. Some new places still don’t have schools and kids are bussed.”

Land is one thing, but other concerns consistently played into the decision of OHB’s resale purchasers. “We felt that the new homes being built lacked character—every room looked like a tan or white box, says Danton. “We love the pocket doors, wide wood trim and large principal rooms in the older houses. 

“We also felt that new homes lack the quality seen in older homes. Many of our friends who have bought new homes believe that the builders cut corners and only met minimal code requirements. We do not want a house that is going to have serious problems in just a few years. Quality is very important to us. We felt that an older, solid brick home that had stood the test of time was going to be a wiser choice.”

“I looked at some new builds, but was not impressed,” says Giordano Cattonar, who recently purchased a condo in the Lakeview, Mississauga area—his first purchase in Canada after coming from England. “Nowadays, houses or condos are built with cheaper materials, have smaller footage, poor acoustic insulation and higher prices, and they don’t have any character.” 

Past experience was another deterrent for Valerie. “New homes aren’t necessarily more energy efficient,” she argues. “I’ve been a new-home buyer for over 10 years, in which time we purchased, lived in and sold three new homes. During that time we also purchased and sold two new condos. The best was the first house, built in 2001; then it got progressively worse. In all homes the rooms over the garage were freezing in the winter. We were told the insulation was to code, but most neighbours had these rooms re-insulated, along with their garages.

“The resale has had the bonus of saving us almost 25% on property taxes just by not being in an ‘estate’ neighbourhood.”

For Rob (last name withheld), who purchased a 27-year-old Crown Homes residence in a Sifton Properties development in London, it was simply a matter of convenience. “We were on a tight schedule and just didn’t want to live in a construction site for two years. We also wanted mature trees. We also knew that any mysteries the home possessed would have revealed themselves by now. And we knew the builder had a strong reputation and the neighbours had spoken well of the development.”

Rob acknowledges it would have been great “to have had the opportunity to wire a new build for the internet and plug ISDN cables into the router,” and wishes there had been a bigger explanation of the potential energy efficiency savings of new homes. “That was not a selling feature that anyone promoted on any of the homes we looked at. I think they need a chart—‘Given this square footage and these windows, your cost would be X.’”

Andrew Croll, who purchased his resale in Oakville’s Glen Abbey neighbourhood, was open to both options, but in the end was swayed by “a few deterrents” from going with new construction. “First was uncertainty and lack of control in timing. We’ve heard so many stories of project delays with little or no control to the purchaser. Second was an uncertainty of final cost. While the headline purchase price may be attractive, the costs to customize your home can be extensive. I was shocked that for even a garage door entrance into the house—which seems intuitive—the developer was going to charge us $10,000.

“Another concern was the actual purchase process,” says Croll. “I’ve heard several accounts of people lining up at these developments when one of the phases goes up for sale, then buyers are selected by a lottery process (or first come, first served) and essentially must make the purchase decision on the spot.”

If builders get the opportunity to address buyer anxieties, however, they can often put fears to rest. “Not knowing what everything was going to look like and the mess of moving in was absolutely a concern, but seeing the renderings helped us picture how it would look,” says Bonanno. “Even after deposit, New Horizon gave us a 100% money-back guarantee within a certain window if all our questions aren’t answered. Also, seeing all the new developments they’ve done has been reassuring, as was the fact that Phase 1 sold out the first day it was available—four floors of condos and 65+ townhomes.” 

Could the experience have been improved? “I did find out that Mattamy offers booklets to new-home buyers with costs for upgrades and pictures of how upgrades look versus having no upgrades. I would have paid good money for that! And we still have many questions, being in a new development. But thus far I have to say that the builder has been fantastic.”