Back HomeBuying a Newly-Built Home vs. A Lived-In Home: Weighing Your Options
When it comes to buying homes, most buyers have one question in mind: is it better to build or buy a home?
Let’s face it: it’s nice to be the first person to live in a brand-new property. However, it’s not without its drawbacks. That’s why buyers should take the initiative to weigh the pros and cons before making this significant investment.
Here are some of the things you should consider if you find yourself caught in a dilemma about whether to choose new construction vs. an existing home.
BUYING NEW CONSTRUCTION: THE UPSIDE
New construction homes, simply by being brand-new, are extremely attractive to buyers. Here’s why.
Almost-zero need for repairs and renovations
One of the most compelling reasons to choose new construction is the peace of mind that comes with knowing everything is brand-new and, as such, functions properly. Unlike lived-in homes that might be hiding flaws and defects beneath the fresh paint and thoughtfully staged living spaces, a new build arrives in pristine condition. From unblemished walls to scratch-free floors and shiny new appliances, you won’t need to set aside a budget for immediate fixes or updates.
Opportunity to make it your own
Depending on how early you enter the buying process, you could just be in time to grab the exciting opportunity to personalize your home. Especially while in its pre-construction stage, many builders allow buyers to select finishes, colors, and fixtures to match their preferences. This may include sharing your choice of paint colors, flooring, cabinet styles, countertop materials, and appliance packages.
Lower maintenance costs
With all-new systems and appliances, you may expect minimal maintenance expenses for the first few years. Modern plumbing, electrical systems, and HVAC equipment not only work more efficiently but also shouldn’t require repairs or replacement for quite some time. This results in significant savings compared to maintaining an older home.
Most come with warranties
New homes typically come with a builder’s warranty, providing valuable protection against potential defects. If issues arise during the warranty period – whether it’s a leaky roof or a foundation problem – the builder shoulders responsibility for the repairs. This additional layer of security may save you from unexpected expenses in the early years of homeownership.
Better aligned with modern building codes
Modern building codes are engineered to create safer, more resilient homes. New construction must meet the latest standards for everything from structural integrity to safety features like smoke and carbon monoxide detectors. This means you won’t face the costly updates that owners of older homes might need to make to bring their properties up to code.
Modern floor plan
New homes are designed with modern living in mind. You’ll typically find open-concept layouts, abundant storage space, and thoughtful features like mudrooms and walk-in pantries. Bedrooms often include large closets, and bathrooms are equipped with adequate linen storage – amenities that might be lacking in older homes.
BUYING NEW CONSTRUCTION: THE DOWNSIDE
Even with the shiny new features new construction homes bring, buying one still has its disadvantages. These are what buyers should be aware of. These include the following.
More expensive than lived-in homes
The convenience and benefits of new construction come at a premium. Recent data from the U.S. Census Bureau shows that new single-family homes command a median price of $436,800. Pre-owned homes, for their part, sell for a median of $384,800, according to the National Association of Realtors®. This approximately $52,000 difference could significantly impact your buying power and monthly payments.
Longer construction time
Unless you’re purchasing a completed spec home, you’ll need patience when buying new construction. The typical build time is around half a year, but supply chain issues may extend this to eight months or more. For buyers with tight moving deadlines, this uncertainty and potential for delays may pose a problem.
Higher mortgage rates
The cost to borrow money typically increases when you’re building a home rather than buying an existing one. Lenders often charge higher interest rates on construction loans to offset the additional risk associated with financing a complex construction project.
Higher closing costs
New construction usually comes with steeper upfront costs than purchasing an existing home. Builders frequently require substantial deposits – often around 10% of the total construction costs – paid upfront as “earnest money.” This deposit demonstrates your commitment to the project and usually counts toward your down payment, but it means you’ll need more cash available at the outset.
Looking for more tips for buying a home? Trust in the great ideas of the experts in Berkshire Hathaway HomeServices (BHHS) Caliber Realty. Call them at 979.694.8844 or send an email here to discuss your plans.
