Purchase an Existing Home or a New Build?
Purchase an existing home or a new build? Who hasn’t been there? It’s time to buy a house, and the eternal question crops up—do you buy an existing home or go new? Immediately the doubt sets in and the questions and the weighing and the balancing the pros with the cons and all that sundry jazz clog up your thinking, taking all the fun out of the decision.
There may be a time when the answer is easy. But this is not one those times, which is why you’ve come to us for a daily dose of homebuying wisdom.
We put both the pros and the cons in a lineup, stared them all straight in the eye, and brought you the best of the best, to give you just what you need: a solid foundation for determining what matters most in the home you’re about to buy.
Let’s be real, the cost of a home and what you can afford is a fundamental factor. And as with many things we purchase in life, there’s something extra sweet about getting a brand new home that no one has ever lived in. Plus you may be lucky enough to select some of the design elements on your new construction home, even if you haven’t done the lot selection or a floorplan selection.
But all that customization comes at a cost, one that isn’t found in an existing home. Builders mark up their wares just like any other business. Their business is building homes, and built into the new home price is their profit.
An existing home is based on the local market and what other homes are going for in that neighborhood, and you may get the same square footage for a significantly lower cost.
Additionally, existing homes often have a larger lot size depending on when they were built, simply due to market demand and new homes being packed into smaller and smaller developments.
Quite often new-construction homes are built far away from major city centers, which can result in increased travel time to work and longer distances to drive to get to attractions and other amenities. But that can also work in your favor, since that may translate into a lower cost for that new-construction home.
For a new-construction home, if you’re the one of the first to purchase in a development, that may mean that you live in a construction zone for a while as the rest of the homes are being built. This also impacts your yard and those of your neighbors, which are generally not landscaped and may remain that way for up to a year after the owners move in.
Existing homes have the benefit of often having matured landscapes and finished yards. The house has also already settled, so strange issues that can crop up from the settling of the home have often already occurred. Which leads nicely into the next topic.
Maintenance vs. Non-Maintenance
New-construction homes not only come with that feeling of being brand new; they often don’t require costly maintenance for several years. Water heaters, roofs, and furnace/AC replacement are distant concerns when you move into one of these. Additionally, many builders offer warranties on their products, some as long as ten years.
Existing homes are the proverbial ticking time bomb. It can be a disheartening experience to have a major issue crop up just after you move in, though these kinds of surprises can be protected against by a good home inspection before you buy.
Traditional vs. New
That existing home may be some gorgeous piece of work from an older era, and that may be, for you, almost priceless. Homes like this exist around the heart of city centers and they can be beautiful to own and live in, provided that’s what you want. What you sacrifice in modern conveniences like outlets galore, USB connections built into your outlets, big kitchen spaces that open into great rooms, and massive closets, you get in personality and quality craftsmanship.
With an existing structure, it isn’t unheard of to find the home of your dreams, file the paperwork, and get into the house in a month or less. Is this a pro or a con? Well, that depends on what you want and what you’re willing to sacrifice to be able to get into your home quickly. You may lose some of the ability to customize what you buy, but you get to move in right away.
There are times that moving in quickly may also be the case with a new construction home, such as with a move-in ready build. But as with the more common method of finding a builder and location, and then being on hold as each phase of the project is completed, it isn’t totally out of the question that you may wait anywhere from six months to a year for your home to be done, depending on the type of new construction home you’re having built.
We’ll say it again—nothing beats finding an expert who you trust. A real estate agent in the area where you’re considering buying a home, an experienced loan officer, the works. They’ll be able to give you the type of insights that are unique to you and may have some best-kept secrets about the builders in your location, and the low-down on the existing homes around you. So don’t be afraid to ask.
I'm a first-time homebuyer.
- Buying a House: Right Size vs. Right Budget
- Four Things to Know About an HOA
- The Top Tax Benefits of Homeownership
- Purchase an Existing Home or a New Build?
- Four First-time Homebuyer Mistakes
- Five Tips for First-time Homebuyers
- Which Loan Program is Right for You?
- Comparison of Four Popular Loan Types
- Thinking Outside-the-box to Get Inside a Home (Infographic)