In a market filled with homes of all shapes and sizes, it’s easy for homebuyers like you to become completely overwhelmed by the number of choices available. Of all the decisions you’ll make, choosing whether to buy a new home or a home on the resale market can be one of the biggest.
There’s no right or wrong answer—buying new construction or a previously lived-in house is a personal choice. Each type of home has benefits, as well as things to think about before signing on the dotted line.
Let’s take a look at a few key areas to focus on, in hopes of helping you decide whether new or “new-to-you” is right for you and your family.
The True Cost of Buying or Building a New Home
Realtor.com looked at recent home sales , and found that the median cost of a new home was about 30% higher than what’s referred to as an “existing” home.
At first glance, it might seem like your money will go further on the resale market. However, if you’re looking at previously owned homes, be aware that the “extra 30%” you’re saving by purchasing a resale can quickly get swallowed up in any renovations or updates you need, in order to make the home feel like your home. The costs of paint, upgraded carpeting, and appliances—along with expensive changes to kitchens, bathrooms, and landscaping—add up quickly.
- Buying a new home means the house (and everything in it) is just that—brand-new. Depending on when you sign a contract, you might be able to choose colors, upgrades, and other options, to make the home you’re buying reflect your personal tastes long before you’re handed the keys. So, from the appliances, to the paint on the walls, you’re the first and only owner. That’s where much of the extra cost comes in—your builders are only passing their costs on to you.
- Just because you’re buying a new home from a builder doesn’t mean you have to pay sticker price. Don’t ever be afraid to negotiate, just as you would with the owner of an existing home. You could get features and upgrades “thrown in” for free and even get the sales price reduced. And if a new home community is near the end of a particular building phase, is getting ready to close sales for good, or has a few homes that have been sitting a while, even more incentives and discounts may become available.
Whether you’re looking at resale or new construction, make sure you factor in additional costs like home warranties, neighborhood amenities, and community HOA fees.
- Be sure you get your own inspection (yes, even on a new home), and carefully review any disclosure statements that would reveal issues related to the house or property you’re buying.
- Get a warranty. Period. Your new home should come with a year-long warranty from your builder, which will be included in the sales price. If you’re looking for a resale home, ask the seller to buy a warranty for you as a condition of your purchase.
We’ve touched on this a bit already, but new and existing homes each have distinct features that the other simply can’t offer:
- Looking at previously built homes for sale in completed neighborhoods gives you a much better feel of each community’s distinct vibe. You’re able to see everything from the number, sizes, and types of trees in the area, to how well the community—and the homes in it—have been cared for. If there are schools, pools, and other amenities available to residents, be sure to visit at different times to measure traffic, overcrowding, and overall satisfaction.
- Resale homes give you insight into their past, whether they’re a year or two old, or have been around for more than a century. A previous owner may have already added the fence, deck, or patio you’re looking for, built a series of raised garden beds, or even finished off the basement.
And if an existing home has already been upgraded and renovated to your liking? Congratulations—that’s where the real value comes into play. Just be sure to find out what conveys, meaning what stays with the home after you close. Nothing ruins move-in day more than realizing the fancy washer-dryer combo you fell in love with during a walkthrough wasn’t included in the sale, and has since joined the previous owners at their new home.
With new construction, it’s important to determine just how far along each community is, in terms of completion.
- A builder’s “early-buyer” pricing may be what brought you onto the property, but discounts are there for a reason. Maybe an additional 400 homes—including the ones in front of, beside, and behind your home—are going to be built after you’ve moved in. So, not only will you have hammer-and-nail construction to deal with, but a mass of construction vehicles coming and going might become your 6 a.m. alarm clock.
- Ask plenty of questions about the community. Take those “COMING SOON” amenities (like on-site community centers, pools, and gyms) shown in beautiful watercolor sketches online and in brochures with a grain of salt—because completion dates might be significantly delayed; or worse, they might never come.
We’re Here to Help
When it comes to purchasing a new or existing home, there’s really no right or wrong answer. In either case, we’ll be there with financing that’s just right for you. Contact Us, or call 877-466-2678, and let one of our experienced BayCoast Mortgage lending professionals walk beside you on your path to homeownership.