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To Build or Not to Build? That is the Question.
One of many prospective home buyers’ early decisions is whether to purchase a newly-constructed or pre-owned home. This decision can narrow your list of cities, neighborhoods, schools, and more – so it matters. And while you may instinctually lean one way or the other, there are pros and cons to each, and some are less obvious than others.
Pros of buying new construction:
- A newly-constructed home is, well, new. It’s fresh, clean, and unblemished. And it was probably designed with current home style trends like dark cabinetry, wainscotting or other architectural details, wooden bathroom vanities, and large “statement” tubs.
- New construction often features whole-house smart technology that can automate everything from wifi to speakers and security systems, lighting, thermostats, and doorbells. While older homes can be retrofitted to incorporate smart technology, incorporating it from the ground up, so to speak, is easier, more effective, and more attractive.
- Newly-developed communities have new amenities to attract contemporary buyers. A pool can entertain kids for the entire summer, and a clubhouse might be a big part of your social life.
- When building a new home, you can make as many or as few decisions as you want. Hire your own architect and contractors to create the home of your dreams. Or opt into a planned neighborhood. Your options may be limited to a set of layouts and finishes, but you’ll likely be able to choose paint colors, flooring types and colors, and various appliances and finishes. You may be able to make bigger changes to the developer’s plan as well, like extending the deck or converting the top of a 2-story foyer into a loft. But don’t forget to budget in the cost extra as well!
- Since your house will be brand spankin’ new, you’re unlikely to be hit with significant maintenance or repair expenses for several years. No worries about replacing a roof or HVAC-system. And, most new homes also come with some sort of warranty.
- Everyone is new. When a new subdivision or any group of new homes are built, everyone moves in around the same time. If you are a young family, a neighborhood with a pool and playground will probably be filled with other young families.
Cons of buying new construction:
- You’ve heard the saying “They don’t make them like they used to,” right? There is some truth to that. Of course, if money isn’t a factor, you can have a home made of gold. But high quality features like solid wood doors, plantation shutters, and non-particle board bathroom cabinets are costly and rare in builder-grade homes.
- All developers and builders are not created equal, so buyers need to research thoroughly. Some are definitely better than others and “bad” ones are likely to come with a plethora of problems.
- Oddly, there are certain “must haves” that are often inexplicably missing in some new homes, like bathroom mirrors, towel racks, and toilet paper holders. So plan to install or have someone else install those after closing.
- If a neighborhood is entirely new, often the grounds are new as well, including trees and landscaped areas. Builders usually install a few easy to grow larger trees and easy care bushes. In other words, it will take a few years for your street to look like a lush wonderland.
- Ching ching. It’s nice to be able to make upgrades to a developer’s basic plan, but they come at a price. Multiple design changes, wood floors, Jacuzzi tubs and recessed lighting quickly add up in cost.
- Depending on the price and the area, newly constructed neighborhoods are often “cookie cutter” style, meaning both interiors and exteriors are one of a few options offered by the developer, and therefore, many houses look alike (because they are).
- New construction neighborhoods are also likely to be located in less developed areas that could change considerably over the next five to ten years. New businesses, churches, daycares, schools, and other neighborhoods will pop up. And with the increasing population, traffic will increase and roads may be widened, transforming the quiet area you moved to into a mini-metropolis.
- Developers and contractors rarely negotiate on price. No explanation needed.
Pros of buying a pre-owned home:
- The seller of a home has probably added a few extras or made some improvements that don’t increase a home’s price, but are nice to have. Window boxes, landscape lighting, and garage shelving are great bonuses.
- Some features that raise the price of a home are definitely worth it. It can be a relief to already have a sprinkler system, screened-in-porch, a fence or even a pool in place, without having to go through the hassle of getting it done yourself.
- More mature homes have more mature landscaping. Existing installations will have had time to grow in and fill out.
- While everything isn’t brand new, needed major (or even minor) repairs that the home needs or that the inspection uncovers can be negotiated.
- Unless the area is a highly competitive and sought after area, you will be able to negotiate and get a better deal.
- No surprises in the area surrounding the neighborhood. There won’t be new strip malls popping up or a big increase in traffic in an established area.
Cons of buying a pre-owned home:
- Even if the seller painted and put new carpet in, there will be some wear and tear on any home that has been lived in. You didn’t get to pick out the decor, and you may not be a fan of the seller’s taste.
- Some features and details may be outdated. The kitchen cabinets are white, which is so five years ago, and the shower doesn’t have a bench, multiple shower heads, or enough space for 20 people.
- Depending on their age, appliances and systems are more likely to malfunction or break down in an existing home. Of course, there is an inspection, but a porch step can become loose, a sink can start leaking and a huge tree can die at any time – including the day after you close.
- Established landscaping is nice, unless you want a vegetable garden where the holly bushes are. In that case, you have work to do.