In today’s highly competitive market there is a vast array of choices to be made when deciding on the type of dwelling you wish to reside in. This summary will focus on the advantages and disadvantages of buying a new home versus a resale home.
Advantages of a New Home
Full Customization from the Start. One of the primary advantages of buying a new home is the ability to decorate your home from the beginning exactly the way you want. You can pick all the colors and finishes, ranging from paint and flooring, to countertops and cabinets.
Everything Is New & Current. Buying new offers the buyer the satisfaction of knowing that everything is new and up to date. When everything is new it is in its best shape. When everything is up to date it reflects current tastes and trends, boosting buyer appeal. Additionally, new homes will have more modern conveniences, better insulation and can be more energy efficient.
Disadvantages of a New Home
Ongoing Construction. Unfortunately, with a new home purchase you should be prepared for the on-going construction you will find around you. Chances are that your lawn will not be in, your driveway will be gravel and your street will turn into a sea of mud whenever it rains or snows. Depending on the size of the neighborhood, it could be a while before all these factors are mitigated.
Uncertainty Of Build Quality. If things are going to go wrong with a newly constructed house, they will appear in the first one to two years. As the house settles you may find cracks appearing in the walls of the basement.
Additional Expenses. New homes are often associated with numerous additional expenses, which are either built into the purchase price or to be paid by the buyer on top of the purchase price. Additional expense can include extra money spent on cabinets, countertops, appliances, window coverings, landscaping, air conditioning, etc. Closing costs are also typically higher for new homes. The buyer will pay for such additional costs as the New Home Warranty Program, tree planting, utility hook ups and paving of the driveway.
Random Uncertainties. Usually, when you buy a new home, miscellaneous uncertainties simply come with the territory. For starters, you don’t have an opportunity to physically see the actual layout before buying. All that is provided is a blueprint and in many cases the end product may be a disappointment to the purchaser. Additionally, there is the uncertainty as to who will be your neighbors. In a resale home, such items can be investigated beforehand avoiding surprises down the road.
Advantages of a Resale Home
Established Neighborhood. The major upside to buying a resale home is that you are moving into an established neighborhood. Your lawn is green, your shrubs are growing, your driveway is paved and your trees are well enough established to give your street a feeling of permanence.
Increased Investment Value. In terms of investment, a resale home will often give you more for your value than a brand new home. Many owners put thousands of dollars into home improvements ranging from small items, such as landscaping, to major projects, such as a finished basement. Although these improvements will make the home more attractive to potential buyers, they may not increase the market value of the home. A $50,000 swimming pool or a $20,000 finished basement or even $5,000 worth of landscaping can make a resale home very attractive. However these additional costs incurred may not necessarily increase the market value of a home.
Negotiable Sale Prices. With a resale, the seller’s asking price is almost always negotiable downwards unlike the builders list price which is usually firm.
Bigger Lot Sizes. A considerable advantage when buying resale is that resale homes more often than not have much bigger lot sizes. In today’s day and age where buildable land is becoming increasingly scarce, new neighborhoods are constructed in such a manner to fit as many homes as possible thereby affecting lots sizes. In new neighborhoods it’s not unusual to have your neighbors house less than 10 feet away from you, which can also have a negative impact on privacy.
Disadvantages of a Resale Home
Lacking in Modern Layouts. A common disadvantage to buying resale is the fact that many resale homes built in years past, especially from the 50’s to 80’s, simply do not have the layouts desired by today’s consumer, specifically, in regards to open concept design, a design that has literally changed the way homes are built today.
Not Move-In Condition. A small percentage of homes in the marketplace are not considered to be in move-in condition and require extensive upgrading. If both live-in partners happen to be working at full time jobs and lack the time, or are not handy, or do not have the funds to address upgrades, then a non-resale home is by far the best alternative. If the property is being under “power of sale” or the property has been rented for many years the home may require a lot of work.
Old Components. As a home gets on in age many components through-out the house such as flooring, countertops and cabinets, in addition to systems such as heating, cooling, roofing, and/or windows may need replacement. This being said, a home that needs some fixing up can in fact present some advantage to a buyer. Namely, it can be purchased below market price, while at the same time providing an opportunity to have it decorated and/or renovated to suite ones specific taste.
The Bottom Line
In today’s market place both new and resale homes are selling briskly. Once you’ve evaluated the pros and cons of each alternative, you can make an intelligent, educated decision as to which option is best suited for your particular needs.