Buying New Construction vs Existing Home | 15 PROs & CONs
The idea of buying a brand new property is desirable. It lets you customize your home, finishing it in the way you want to your specifications. However, new constructions do have negatives over buying an existing home.
Let’s look at the pros and cons of buying a brand new construction home vs an already built existing home to help you make a more informed choice.
The Pros of Buying New Construction
Let’s review the positives of building a brand new home :
There is a lot to be said for having a home that nobody has lived in previously. The home will be cleaner, everything will be new, and there will be fewer surprises than you would expect with a resale home.
You won’t have to put up with the previous owner’s design choices and get to start with a blank canvas. A brand new home should also require less maintenance than older properties. This should reduce the chances of things breaking, leaks happening, and urgent repairs. But even if something does go wrong, you should be covered by a warranty for the first few years anyway.
Pick Your Lot
When you decide to buy new construction you can choose the lot. This could let you choose a bigger parcel of land, perhaps a corner lot, or a location in the development that will give you better views or access.
There’s an old saying in real estate, which is location, location, location because it matters. Not just for you and your lifestyle but the lot you select will impact the value of your home when it’s time to sell.
Lots can increase or decrease the value of your home depending on where it’s located. It will also be a factor in how quickly the home will sell once placed on the market.
With increasing concerns about rising utility bills, energy-efficient homes will become the focus of many more buyers. And with a new home, you can build in efficiencies that will save on your utility costs for the rest of the time you’re living in the property.
Changes in building codes and a greater focus on energy use, mean that new homes typically benefit from reduced utility bills. With a new build home, you can make sure that the builder is doing everything they can to reduce your energy consumption.A new construction home can be very appealing especially when compared to an existing home, but it's important to weigh the pros and cons. #realestate #homebuying #newconstruction
Your Choice of Floorplan
When you are looking to buy an existing property, you’ll have to put up with their original floor plan for a while, at least. With a newly constructed home, you might be able to make changes to the layout before construction begins.
Choose to have a wall removed or a new doorway added to better suit your living requirements. While this might increase your construction costs slightly when deviating from the standard design, it will save the cost and inconvenience of making these changes later.
Choose Materials and Finish
When you decide to buy new construction, you’ll get the opportunity to choose how the home is finished. You can choose what flooring you want, what color the walls are painted, and select kitchen cabinets and counters, among many options.
This allows you to have your home customized the way you want it without having to do any of the work yourself, or put up with contractors in your home for weeks. Choose the finishes that suit your tastes and style, as well as the features that meet your requirements.
You can normally expect to get a warranty from the builder on your new home. These types of warranties typically cover more things than homeowners insurance will or warranties that are bought later on. And since the builder will likely still have crews working on the development, any required fixes should happen quickly.
Sometimes these build warranties will last 2 years and are often easier than filing an insurance claim when something goes wrong. However, not all builders are reliable, and you should make sure they have a good track record before you choose them to build your home. Check their Better Business Bureau profile for complaints and other customer feedback.A new construction home can be very appealing especially when compared to an existing home, but it's important to weigh the pros and cons. #realestate #homebuying #newconstruction
Cons of a New Construction
Though the pros of a brand new home are going to be appealing, you shouldn’t ignore the negatives:
There is a lot of uncertainty whenever you move into a new home, but when you build in a brand new development, there’s more. With an unestablished neighborhood, you won’t know who your neighbors are and how they will maintain their property.
You could find yourself living next to neighbors who love loud late-night parties. With an existing home, this is less likely to be a problem.
Uncertain Closing Dates
While things can go wrong with any home purchase, pushing back the closing date, there are more potential problems with new construction. Things like adverse weather or difficulty in sourcing construction materials can delay the closing date on your home.
The builder will give you an estimated closing date, but this can change by weeks or even months. You could be waiting for about 5-6 months at a minimum for your home to be constructed, but it could be over 12 months. If there are then delays added to this, the wait to move into your new home will be frustrating. This could have serious cost implications as well, leaving you to find somewhere for your family to live until the home is ready.
If you require a home loan to buy your newly constructed property, as most people do, you could find the interest rate has changed by the time you close on the home. With a longer amount of time between agreeing to buy the home and it being ready to move into, there is a greater chance that the interest rate has changed. Unfortunately, locking in the interest rate for 6+ months is not an option.
This could go in your favor, with rates dropping, but things could go the other way. Even small differences in the interest rate will result in you paying a lot more interest on the mortgage increasing your monthly expenses. These are one of the many questions you’ll want to discuss with a mortgage broker prior to making a decision.
When you’re buying a brand new home, you can expect to pay a premium. The premium you’ll have to pay will vary depending on the area, but the extra expense is still worth it to many people.
When you view the builder’s model home, it is easy to fall in love with all the features the home has. However, you have to remember that this model home will include all the bells and whistles. If you decide that you need these features in your home, be prepared for the price to increase considerably.A new construction home can be very appealing especially when compared to an existing home, but it's important to weigh the pros and cons. #realestate #homebuying #newconstruction
Builder Grade Materials
The materials the builder uses to construct the home could be average builder grade, even when spending more on a luxury home. That means items in the home aren’t going to be the highest quality, instead being more cost-effective to maximize the builder’s profits.
While everything should function, and you’ll likely have a builder’s warranty, some of these materials will be of lower quality. Things like light fittings, plumbing, kitchen cabinets, and more, might need to be replaced sooner than you would expect.
While you might imagine that buying new construction means that you can select whatever materials you want your home finished in, this won’t always be the case. Most of the time, your builder will only offer a limited range of options for the materials you can select.
So if you want particular counters or cabinets in your kitchen, you might not be able to get exactly what you want. If you have your heart set on a particular type of flooring, you might discover that your builder doesn’t offer it. This will result in you having to settle for a compromise and the possibility of making expensive changes to your home later on.
Though you might like the new house smell, the gases that have created that smell can actually be harmful. Volatile organic compounds or VOCs are responsible and can be dangerous to your health, causing long-term problems.
For example, formaldehyde is one of the most common chemicals released from wood in a new house. This chemical is used to embalm bodies but isn’t so great for the living. New carpets and curtains can also release chemicals that could trigger allergies or more serious health problems.
You could be exposed to thousands of different chemicals in a brand new home, and it could take a decade or more for these to fully clear.
When buying a house, there is normally the chance to negotiate on the price to get a better deal. This option is less likely to be available when you’re buying new construction.
The base price of the home is normally fixed by the builder. While they will add to this price for the features you want, they likely won’t offer you a deal on the base price.
Sometimes property taxes are more expensive in new developments. This is because there isn’t the infrastructure already in place, and the development might have taken out a loan from the city to cover the cost. The loan to pay for roads and other infrastructure will be repaid by local taxes, which could double the bill.
Higher taxes could also make being approved for a home loan more difficult. The property taxes could reduce the amount the lender is willing to loan, possibly stopping you from being able to buy the new build.
A newly constructed home is appealing for many reasons, but before you set your sights on a brand new house, you need to consider the downsides.
Though you might get closer to your perfect home with a new build, it does come with additional costs and potential problems. Not everyone can handle the potential stress of building a new home while others will easily stay sane during the home construction process.
So after weighing the pros and cons, you might find buying an existing home is the more attractive option.
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About the Author
Top Wellington Realtor, Michelle Gibson, wrote: “Buying New Construction vs Existing Home | 15 PROs & CONs”
Michelle has been specializing in residential real estate since 2001 throughout Wellington Florida and the surrounding area. Whether you’re looking to buy, sell, or rent she will guide you through the entire real estate transaction. If you’re ready to put Michelle’s knowledge and expertise to work for you call or e-mail her today.
Areas of service include Wellington, Lake Worth, Royal Palm Beach, Boynton Beach, West Palm Beach, Loxahatchee, Greenacres, and more.