Brand Spankin’ New or Tried and True?
There is no denying that the smell of a brand new home can be enticing, but don’t forget the classic charm of an established home. Making the decision to purchase new construction or an existing home can be very confusing. There are many upsides, and downsides, for both options. So how do you know which is best?
One of the main reasons that some decide to build a new home is that you can fully customize the home exactly the way you want. Jacuzzi tub with luxury shower? No problem! Chef’s kitchen with gas cooking? Of course! Customization for a new home is relatively endless, assuming the funds in your bank account are as well.
Bells and whistles
Another reason for building a home is that the latest and greatest technologies will be used to construct the home. So adding in a state-of-the-art surround sound system is no problem. While there are many fun technologies that can be added, there are also some that can save you money. For instance, newer homes are often more energy efficient due to new energy saving laws which will save you money on utility bills each month.
Better for your health
Bet you didn’t know a new home can be better for your health (we suggest making this point to your spouse if you are a couple)! A new home can literally be better for your health considering they are much less likely to contain toxic materials. Lead paint, asbestos and mold are all very concerning problems that you can face with an older home. While there are tests that can usually determine if any toxic materials are present, some would rather not take the chance and start with a clean slate.
While every home will need regular upkeep and maintenance, a new home will need much less for a period of time. Many new homes also come with a 1 year warranty from the builder as well. Not only will this save you money, but it also means you won’t have to miss out on Sunday football while making that repair!
Higher upfront costs
Chances are when building a new home you will have much higher upfront costs than buying an existing home, sometimes up to 20% more. You will be asked for a deposit (amount will depend on the home being built) in order to hold the property until you begin building. In addition, most builders will require that you provide 10% of the cost upfront before they will even break ground. Hope you have been saving!
Many unexpected costs can arise when building a new home. While most building costs will be outlined, often there are additional costs that come up throughout the process that are unavoidable. Whether it’s a glitch in the plumbing to your new Jacuzzi or a rainstorm that causes flooding, it’s best to go into the building process expecting some additional costs.
The average time it takes to build a home is 4-6 months, which is much longer than the typical purchase process of an existing home. While in depth planning will occur prior to building the home, if any glitches are encountered along the way you may be pushed weeks if not months out from when you expected to move in. This is especially frustrating if your kitchen appliances and new living room set are due to be delivered!
Potential for additional construction in the area
Depending on the area that you choose to build a home, there may or may not be detailed information regarding any additional building planned for the area. A huge selling point for you may have been the beautiful pine forest backing up to your property. Little did you know that two years later you would be able to stare into your neighbor’s kitchen window or lose your backyard privacy. It definitely pays to research.
Generally the cost to build a brand new home versus the actual resale value is much higher. Expect that you will invest more money when building new than what you will get back out of it when it comes time to sell the home.
Unless you are purchasing a foreclosure or short sale home or run into unusual circumstances, purchasing an existing home typically takes 30-45 days. Many homebuyers are eager to begin moving so this time frame can seem much more manageable versus the amount of time to build a home. After all, who has time to wait for a small forest to be cleared before building?
Money goes further
Typically you can get more for your money when you buy an existing home. So for instance you could have a relatively plain but new home, or an existing and slightly larger home with all the bells and whistles for the same cost. Also, unlike when building, you can decide on an amount you want to spend and not exceed it with unexpected costs.
Established features and charm
While you may be able to replicate classic features when building a new home (with a price tag), there is something to be said for the charm that often naturally accompanies an older home. Depending on the area there may also be established amenities such as walking trails, play grounds, a workout center or a pool.
Hard to find exactly what you want
When looking at existing homes it can be difficult to find everything you want in one home. Realtors often suggest making a ‘must-have’ list with your make it or break it items for this very reason. A lot of time can be spent looking at homes but chances are that unless you build, it will be almost impossible to find everything you want in one home without making some modifications.
Costs to upgrade or renovate
When buying an existing home you will most likely want to add your own personal touches. Whether it’s simply painting over all of the bright colors that the previous owner went crazy with, upgrading ancient windows or renovating a 60s bathroom, all of this will require time and money.
Although an inspection will be completed on the home before you agree to buy, unfortunately problems can still crop up. Sometimes problems can be missed altogether during the inspection or don’t occur until a few months in. Depending on the problem, some fixes can cost you a pretty penny. Just be prepared that you may have some additional expenses, especially in the first year as you make discoveries around the home.
Still uncertain as to which option may be best for you? Nestiny can help by walking you through our Journey Homeward to identify your wants and needs while also providing you with a detailed breakdown of your financial picture through the True Affordability Tool. You will also find valuable information and fun games along the way that will help you narrow your focus even further and get you ready for this great adventure. Don’t become overwhelmed with the home buying or building process, Nestiny is here to help!
Want more homebuying advice? Nestiny is a great place for homebuyer education and to help you gauge how ready you are to buy a home. Journey Homeward allows you to enter all of your wants and needs while the True Affordability Tool will break down your budget, showing what you can comfortably afford. You will also receive a free Ready Report that is personalized based upon the information that you entered. This report will give you a vital head start in the home buying journey, saving you valuable time and money.