Should You Buy a New or Existing Home? - New homes are popping up all around the country as confidence in the housing market continues to rise.
Contractors are getting back to work, and soon, their construction sites will be full of completed homes that are ready to be purchased.
But should you save up for one of those new homes, or purchase an existing one?
Deciding if a newly-built home or a resale is right for you often comes down to your finances and your personal preferences.
Speaking of personal preferences, you may get more of them with a new home. There are two types of new homes – ones that are designed and built by a developer and then sold to a buyer once construction is complete, and others where the buyer purchases the land and helps design the home before construction ever begins. In both of these scenarios, the buyer feels like they have more control over the layout because they can either build from the ground up or choose from various different styles of homes built by the developer.
Also, with the housing market still recovering, sometimes developers will add incentives to a home to entice a buyer to purchase it. They will often not charge for extra amenities or upgrades, or reduce the price of the home by a small percentage in hopes of helping it sell. Another major selling point for new homes is that they come with a builder's warranty, so if something is damaged or needs to be replaced, often the cost of those repairs is covered.
The main disadvantage to a new home is that they usually cost more than an existing one. Builders put a lot of money into the construction of a home, so they want to recoup their expenses. While some will offer assistance with closing costs, few will actually reduce the base price of the home in order to maintain price integrity for their work! There’s also another disadvantage – the noise. If the home is located in a new community, you could be living in a construction zone for the next few years until all of the homes in the neighborhood are complete.
What about an existing home? What are its pros and cons?
One of the biggest advantages of buying an existing home is that you can determine the long-term value of the home more easily than you can with a new home. After all, when purchasing a resale, you can take a look at historical perspective of the community as a whole. In other words, you can see what homes in the area have sold for in the past, both during the housing boom and the recession, which allows you to determine the true value of the home you are buying.
Also, you can know more about the schools, your potential new neighbors, and the area before buying the home. In a newly-constructed subdivision, all of those factors are unknown.
Of course, the disadvantage of buying an existing home is that you can't easily customize it to your lifestyle. Sure, you can remodel or renovate the home to add an additional room or two, but that will cost you more money – whereas in a new home, you can tell the builder how you'd like it to look, and get your dream home for one price!
Regardless which route you end up going, experts say the best way to determine if the home is going to maintain its value over time is the location and condition of the home, not its age. In other words, newer isn’t always better!
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