Pre-Owned VS New Home?
Should you build new or buy an existing house? Today I’m talking about the pros and cons or both, so let’s get started!
Before you decide on your next home, take the time to explore all the reasons “for” and “against” each choice with the help a seasoned Real Estate professional.
An experienced Realtor can not only save you money, but can offer you solid advice and guidance based on Your specific circumstances.
Oh, And as a buyer, You do not pay for this valuable representation. ( Realtors are paid from the sellers proceeds at closing)
So let’s dive in.. Let’s talk about some Pro’s for Building a House:
Pro # 1
Less Competition in Todays Market…
Inventory of existing Homes is still low. And with some sellers temporarily taking their homes off the market, the number of homes that buyers have to choose from is even less…. For now at least.
The buyer demand is still very prevalent and so the existing homes that are appropriately priced are being snatched up very quickly.
When you build a new home, the competition factor is decreased dramatically.
Pro # 2
When building a home, you get to personalize details of your house from the ground up.. Like Cabinets, Flooring, Paint Colors.. for example.
Even tract home builders allow some limited customizations.. Limited choices cut labor costs and your bottom line!
Pro # 3
Built in Technology, Energy Efficiencies and Warranties
Most New Construction homes are built with up-to-date technology like the newer thermostats and security features.
Also with New Construction, it is unlikely you will have to be concerned about any possible home repairs, like a air conditioner or leaky roof repairs. Most builders also offer a limited warranty should something break.
I bet you’re thinking all this sounds really great so far!
So why wouldn’t choose to build a new home?
Con # 1
Timing of Your Move
For starters, it can take and average of 5 months to build a new house. If you have a home to sell and need the proceeds of that sale to buy your new home, timing can be a little tricky…and stressful for some.
You’ll need to cover the costs of renting until your new house is ready, and also the inconvenience of moving twice.
On the flip side, buyers can move into their ‘pre-loved’ home in just a few weeks after getting in contract.
Con # 2
The Price is The Price!
Here’s another biggie: Everybody wants a good deal! But with new construction, there is no negotiations on the price of the house. The price is the price.
Now, most builders offer other incentives, like paying some or all of your closing costs or offer an upgrade allowance.
This is where having your own Real Estate agent comes in handy!
An experienced Realtor knows the builders in town, and most likely has successfully completed several transactions with the various builders and also knows how most of them work as far as what the builders will bend on and what they won’t. Knowing these things, your Realtor may be able to work in other incentives into your contract price.
Con # 3
Out of pocket expenses will sneak up on your fast! Upgrades and changes to the plan for example.
The base price of the new construction home is just the tip of the iceberg!
Play it safe, and budget for these things with cash, because you may not be able to roll them into your purchase contract.
A good start to avoid any of these unexpected surprises is to first ask the builder a few questions, like:
- How much does your typical buyer actually spend on upgrades?
*Be careful here..Your Realtor can advice you if you would be over-improving for the neighborhood –for resale value.
- What’s included in the base price?
For example: Does ALL appliances come with the home?..If not, ask your Realtor to negotiate this for you. Oh, and btw: Builders do not give credit for replacement upgrades.
Say you would prefer to have your own refrigerator opposed to the one the builder would install. The builder is not going to give you a credit for the refrigerator they install. It would be up to you to sell or give away the one installed at your closing if you wish to bring in your own refrigerator after closing.
- What will be an additional cost at closing?
You’ve heard me say this before: Knowledge is Power.
Work with Your Realtor and gather as much information as possible ahead of time so you’re not blindsided with unexpected extra costs.
Now let’s talk about the Pros and Cons of buying an Existing House..Or what I like to call “pre-Loved” homes.
Pro # 1
The biggest “pro” for buying a pre-loved home is the cost! Everybody wants a great deal, Right?.. Your Realtor has the flexibility of negotiating everything with the current owner or their representative.
That means Not only Price, but terms and all the little things that may be important to you and your individual circumstances.
Not to mention, it is lot less stressful to buy a pre-loved home opposed to building new.
With new construction you have a lot of work to do..like having to make decisions on what paint color,hardware,flooring, lighting, interior trim, exterior trim..the list goes on and on.AND stay in budget. Oh, and don’t underestimate the stamina it takes to make sure it’s done..the right way!
With a preloved home, the decisions are far fewer because the home is already built!
Another perk of buying a pre-loved home is the flexibility to upgrade at Your pace as when you have the time and money to do the things YOU want to do and when you want to do them.
Also, No waiting to move in. You can move in right away after closing on a pre-loved home. From contract to Close is typically 30 days.
Now for some ‘Cons’ when buying an existing house:
Clearly there may be some risks you may face with maintenance issues. You don’t really know how well the current owner cared for the home.
Although, I have to say, sellers have become very in tune with their competition..meaning New construction and are taking the advice of their Realtor by taking care of these potential items before listing the home. I’m seeing more and more existing homes with modern updates than ever!
Even if the seller has gone to the expense of updating and upgrading, It is always, strongly advised that you get a complete, professional home inspection. A fully licensed home inspector will go over every inch of the home to root out any maintenance or repair issues before you close on the home.
In addition, you may have to update a few cosmetic features of the home. However, if you have an experienced Realtor, that ugly carpet or wallpaper could land you a better deal!
With all this being said…Every Neighborhood is different, just like every buyer is different.
The best way to decide which choice is best for you and your family, is to talk it over with your Realtor.
He or She will know where the deals are and know about the long-term, established neighborhoods and also the up-and-coming communities.
They’ll help you make smart decisions that best suits your needs when you’re unsure if building a home or buying a pre-loved home is ideal for your individual circumstances.
Buying a home is a huge purchase, and you should feel empowered in the decisions you make with your money.
If you’d like to chat with me personally, I offer free 15 minute video consultation calls. No selling, no pressure..Just your questions answered. You’ll find the link below to check my calendar for available days and times.
Check Available Days and Times Here
I’m Lisa Kelly, right here in Lakeland…And until then…I’ll see you on the next one.