When the time comes to buy a home, you'll be faced with a number of critical decisions. Chief among these is the choice between buying a newly built home or purchasing an existing property.
On the face of it, it may seem like a simple decision. Newly built homes are – well – new, and that delivers some definite advantages to the home owner. You can choose the floor plan you prefer, and start out life in your new home with up to date amenities and state of the art appliances. On the other hand, you may be limited as to where and when you can build your new home, and you may find that the costs of new construction outweigh some of the obvious lifestyle advantages.
Existing properties offer a bit more flexibility for the buyer, both in cost and location, but they too have their own disadvantages to consider. Financing can sometimes be difficult to secure, and there is frankly more competition for the choicest real estate.
All in all, there's much to consider when choosing between a newly built home and a resale property, and it is important to look at all of the variables before making any final decisions. If you're in the market for a new home, the following key points of comparison should help you decide which option best suits your situation, and will hopefully help guide you to the home of your dreams.
One of the major concerns that all home buyers have is ‘cost', and there is a sizable gap between the price of a newly constructed home and that of a resale property. Currently, the average cost of a newly built home is roughly $300,000 (not including Acreage). That's assuming you are sticking with the basic model and not opting for any expensive upgrades, in which case the cost can rise significantly. It's also worth noting that new construction remains at an all time low, making competition for newly built homes rather fierce. This can also have an impact on the cost of new construction, particularly in areas where new builds do not keep up with local demand.
On the other hand, the average sale price of an existing home is approximately $278,000 (as of the latest US census), roughly $60,000 less than the cost of new construction. Depending on the terms of your mortgage that can add up to significant savings over the life of your home loan. Moreover, there is a greater opportunity for negotiations when purchasing an existing property, which can often result an even lower sticker price (an option that is rarely available with new construction). If you buy something that is move-in ready, then you may have further savings from not juggling multiple payments in parallel while you move.
Repairs and Renovations
Of course there's more to the cost of a home than the sticker price, and it is important to consider the need for any repairs or renovations to the property you are buying. New homes are unlikely to need any significant repairs for at least 7 years, and in most cases those should be covered under warranty. The opportunity to customize your home during the building process (changing the floor plan, adding in closet space, or upgrading to state-of-the art appliances) also eliminates the need for any major renovations.
Older homes, on the other hand, may need some repairs or renovations that will ultimately increase the total cost of the purchase. Ideally, these should be minimal, and buyers should be able to address them as time and finances allow. Depending on the age of the home, most experts agree that you should have the property inspected beforehand, and that you allow for the cost of future repairs and renovations when considering the total cost of the purchase. That being said, older homes often have a unique architectural charm that you rarely find in newly built houses, and that can sometimes offset the cost of any future repairs or renovations.
Additional Costs of Ownership
In addition to the price of purchase, there is also the costs of ownership to be considered. New homes are typically more energy efficient than older houses, having been built with newer building materials, better insulation, and state-of-the-art tech. Consequently, energy costs should be lower than with a resale property. Older homes tend to be less energy efficient, and that can lead to higher monthly expenditures for the new owners. On an old home, you never know when the hot water heater will need replaced, or if the 50+ year old pipes under the house will get clogged and cause the plunged toilet water to start coming back up through the bathtub! For buyers considering condos or townhomes, monthly HOA fees often increase significantly after the building has been in place for 5 to 10 years, as leaks and other repairs increase the cost of maintenance.
This post was originally written by:https://www.mortgagecalculator.org/helpful-advice/new-vs-existing-properties.php
Author:Shalonda Lampkin Phone: 407-490-5023 Dated: April 30th 2019 Views: 40 About Shalonda: Shalonda Lampkin has a heart describe like pure gold and unbridled enthusiasm. Her life has ta...
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