Buying New Construction vs Existing Homes
Buying New Construction vs Existing Homes
Should you buy or build a home? The buyer’s journey begins with the home search. Long before closing on the ideal home and moving in, buyers are faced with a rather difficult decision: if they should buy new construction or an existing home. There are many pros and cons on both sides when deciding between a new home versus a resale, so it’s important for home buyers to account for everything when they decide to buy a new home.
While a large portion of homes sold are resells, new construction is on the rise in many areas with an increasingly healthy housing market. As a buyer, it’s important to differentiate between a newly built home and older builds to assist in the home search.
Determining which home build is more subjectively and objectively appealing will aid buyers in budgeting, singling out locations, and determining how to best finance the property. Though new construction and existing homes offer numerous benefits, both builds have unique advantages disadvantages that attract or detract certain buyers.
Home build preferences vary, so acknowledging the pros and cons of buying a new construction home and an existing home is essential before buying.
Should You Buy a New Construction Home?
New construction is at the top of many Minneapolis area home buyers' dream home wish list. These unlived-in spaces offer buyers fresh starts with modern appliances and gorgeous finishes. Purchasing a new property means expecting a pristine exterior and untarnished interior upon purchase. Developers must adhere to the most current building codes, ensuring fewer repairs are needed after moving in. In addition, builders often throw in home warranties to guarantee any possible repairs are paid for and dealt with swiftly.
New construction home buyers typically also have the ability to customize the property prior to purchase. Fixtures can be tailored and elements of an unwanted floor plan can be changed even after construction begins. Unlike purchasing a previously built home, new properties allow buyers to communicate directly with the developers and express their wants during the construction phase. This is a major benefit for buyers with a specific aesthetic for their future home.
The Price of Buying New
Constructing the ideal dream home comes at a high price, though. The premium building costs may be unaffordable to many buyers, including the large demographic of first-time homeowners. The massive price tag of a new home is due to several factors. Buyers not only pay for the labor and materials used to build their new construction, they’re often also tasked with the financial burden of procuring the ideal location.
With increased construction, many buyers are hard-pressed to find a lot suitable for a new home, especially in flourishing cities and up-and-coming suburbs. Unless a buyer is working with an experienced developer, many ideal lots are gobbled up by builders willing to sell at premium prices. For buyers looking for a less time and money-consuming purchase process, looking toward existing homes is one possible solution.
What Sets New Construction Home Buying Apart
There are many reasons why home buyers may decide that a new construction home fits their needs better than a home that already exists. These reasons may also be due to limits that existing homes have that new construction homes lack. In fact, there is a number of different ways new construction homes can be customized or negotiated for that are impossible or extremely difficult in existing homes. Here are some of the options new construction homes have that buyers may want:
- The home’s layout is customizable.If the buyers want to add something or change a room’s location, they can work with the builder to make it fit their needs.
- Buyers can negotiate with builders. It’s normally very difficult to have sellers pay for closing costs when selling a home, but builders can be more willing to cover those costs if the buyer negotiates well.
- The home is guaranteed to be in good condition. Because no one has ever lived in the home, there is a very low chance of finding things that have gone wrong during the home inspection. And because the home is new, it will have to be up date on all current housing codes.
Any of these advantages can appealing enough to convince a buyer to purchase a new construction home instead of an already existing home. However, there are also advantages to buying an existing home that are difficult to find in new construction homes.
The Benefits of an Existing Home
Buyers searching for a more cost effective and speedy solution may want to seek out existing homes. These homes appeal to buyers wanting to move in immediately after closing. For home buyers needing to relocate unexpectedly, move-in ready properties are essential. Existing homes also offer the ability to deal with flexible sellers. Unlike the developer’s firm asking price, homeowners are sometimes willing to negotiate to sell.
To attract buyers, some sellers must incentivize their Blaine property by offering price drops or paying closing costs. The flexibility of purchasing an existing home also allows buyers to walk away without penalty before closing if they follow the correct steps. While developers typically require large deposits upfront, buyers aren’t legally committed to pre-existing homes before signing the purchase agreement. This is crucial for buyers fearing commitment.
What to Watch for With Older Homes
The disadvantages of owning an older build are valid and must be considered before initiating the home search too. Unlike new construction, existing homes are sometimes sold needing unexpected repairs and costs. Numerous repairs are undetectable with a home inspection and can be easily missed during an open house.
For the buyers of old homes, leave wiggle room in the budget for the unexpected. Existing homes also offer an unchangeable layout. While light fixtures and appliances can be replaced, the floorplan of an existing home is more or less permanent. No amount of home rehabbing will fix the flow of an obsolete floorplan.
Before building a new home or buying an existing home, it’s vital to consider the property’s build and its associated benefits and disadvantages. Though neither home build is perfect, determining whether to buy new construction or an existing home is the first step to purchasing the perfect property for a buyer.