Should You Buy a New or Existing Home?

September 25, 2019
Posted in Real Estate
September 25, 2019 Hello Collective Concepts

Should You Buy a New or Existing Home?

Maybe your dream home has the intricate details that you usually find only in older construction – the front porch with a swing, mature citrus trees in the back yard, and vintage touches. Or maybe your dream home has all the conveniences of modern living – an open floor plan in the living and dining spaces, large windows, connected, “smart” appliances and security systems, and minimalist design elements. So, should you buy a new or existing home?

Whether you go for a brand new construction or an existing home, both types of properties have their pros and cons when it comes to purchasing. What type of home is right for you will depend on which factors are most important for your lifestyle.

Buy a new or resale home

Design your dream home with new construction

If you’re making a home purchase that’s still in the pre-construction phase, you may be able to customize many of the details and finishes. Many home builders will give you the option to add design elements that will give you the exact dream home you desire. If it’s a new subdivision, you may even be able to pick which lot you like best.

Very early in the building process, you may have more room to customize. For example, if the walls aren’t complete, you may be able to add extra outlets in each of the rooms or custom wiring for surround sound in the media room. Perhaps you could move the laundry room to the top floor instead of the basement.

Later in the building process, you may be able to add your pick of countertops, an island, and custom cabinets in the kitchen. Your master bathroom could be upgraded with a steam shower, spa tub, and European fixtures. You will want to check with the builder to understand which features are included, and which ones will cost extra.

New homes save money with fewer repairs and more efficiency

Once your home is complete, all you’ll need to do is move in. New appliances will be under warranty for a few years if they need repairs, and will likely work well for several years without needing fixes. Often, new construction is under a builder’s warranty, so any repairs needed in the first year should be covered.

New homes often contain energy-efficient and green appliances, like high-efficiency stoves, refrigerators, washing machines, heaters, or air conditioning units. These energy-saving appliances, along with good insulation and energy-efficient windows, will help you save money on monthly utility bills.

New homes also often use new building materials that require less maintenance so you won’t need to spend as much to maintain your new home.

If you customized your home during pre-construction, you won’t need to spend any money on renovations or upgrades for several more years. You can just enjoy your new home and not worry about saving for major home projects.

What you need to do to make a good new home purchase

Before you put in your offer, do some research on the builder. Do they have a good reputation? What else have they built? Did their other new properties have issues such as poor construction or unfinished details?

The model homes are always beautifully designed and picture perfect. However, they tend to include a number of upgraded elements. So know that when you are quoted the price the home, it is the base model pricing. Any upgrades or changes to the design will cost extra and you will need to have money in your budget for them. Also, in many communities, you will need to pay extra for landscaping packages that are not included in the base price.

After you explore the home options in the community, come back to the neighborhood to see what it’s like at different times of the day. Walk around in the daylight and in the evening, and see if you can envision yourself living there.

You may also need to be flexible with your move-in date. Builders will only be able to let you move in if they can meet their construction schedule. If the wiring is delayed, the walls can’t be finished. And because there are so many construction tasks that are dependent on the completion of prior tasks, schedules tend to slip.

Get more variety and established neighborhoods with an existing home

With existing homes, you will get more variety in home styles, as different types of construction have gone in and out of style throughout the decades. Within one neighborhood, you may be able to find a mix of different styles like tract style, ranch or split-ranch, or contemporary homes.

Existing homes are situated in established neighborhoods, which may have more amenities nearby that a new home in a brand new subdivision may not have. Your new neighborhood may have restaurants, cafes, and boutiques within walking distance or a short drive.

You might also have access to more supermarkets, dry cleaners, discount stores, and gas stations nearby. An established neighborhood might have a nice park, running path, or playground for the kids to enjoy. You might also be closer to a library or the post office.

Resale homes can be a less expensive purchase

If you’re considering a resale home, you may be able to get into a beautiful, unique property at a lower purchase price than a new home.

There are many more resale homes available than there are new homes — according to the National Association of Homebuilders.  You may have more room to negotiate the selling price of the home if there is a larger inventory of similarly priced homes. With brand-new construction, you won’t likely be able to have the same kind of negotiating power.

Before putting a home on the market, sellers often make home renovations or remodel parts of their homes to make them more attractive to buyers and to potentially increase the sales price. If the resale home has a brand new, modern kitchen, an updated bathroom, or even a new roof or upgraded windows, you could end up getting a home that’s comparable to new construction without having to pay the potentially more expensive new home list price.

Between conducting a home inspection and reading through the sellers’ disclosures regarding the home, you will get a sense of issues and what repairs are needed or imminent. Knowing the track record on your potential home will help you avoid purchase mistakes and you’re much less likely to end up with a property that has a rotting roof, dangerous electrical wiring, or a crumbling foundation. With a new home, you could end up with incomplete construction or major issues that you didn’t know about because they weren’t yet documented.

What you need to do to make a good resale purchase

Before you go too far down the road of purchasing a home, you need to protect yourself by first having the home inspected. A good home inspector will document the flaws he or she finds, no matter how small they appear. If the inspector finds any major problems, like foundation cracks or leaky roofs, you may be able to negotiate and get the seller to either fix them or reduce the selling price.

Even if the inspection doesn’t uncover any major issues, you will need to expect the unexpected. Older homes will eventually need replacement appliances, a new air conditioning unit, or a plumbing repair. As long as you know that before you buy a resale home, you can financially plan for surprise repairs.

With an older home, you may want to eventually remodel parts of it. Will you be happy living in your house while you’re doing major work on the living room or the kitchen? If you know that it would disrupt your lifestyle too much, you may want to consider whether you really want to buy an older property.

Whether you choose to buy a new home or an existing home, the best way to get started is to speak with your trusted real estate professional. We have access to both new properties and resale homes that may fit your goals and can suggest neighborhoods that will serve your needs.