Aspiring homebuyers today are not having things easy. It is a buyers’ market and there is a shortage of inventory to choose from.
A few statistics will prove this point better.
Nationwide, there were 1.27 million active listings in September, down 13% from the previous year. According to the National Association of Realtors, that’s about 2.4 months of inventory, which is far less than the six months that is generally needed to strike a healthy balance between supply and demand.2
Given this scenario, what do you do to get your dream home? You must be flexible and expand your search to both existing homes and new builds. But these entities cannot be compared and are completely different, each with its pros and cons.
This post will go into the various factors to consider when you want to buy a home and face the dilemma of choosing between a new build and an existing home. Please take a moment to watch the video below as we go through the PROs & CONs of buying a new build or an existing home. Then book a meeting and we can develop a clear plan to get you into your dream home!!
![New Build Vs Pre Owned Video [BLOG]](https://i.ytimg.com/vi/3u9c-WWSlNE/maxresdefault.jpg)
TIMEFRAME
One of the critical points that will help make up your mind between a new build and an existing home is how quickly you want to move into your new home.
New Build
Do not expect to get the keys to your new house soon if you opt for a new build. The COVID-19 pandemic threw up unique challenges for builders in the form of shortage of raw materials, rising labor costs, and shipping delays. Normal pre-pandemic levels are yet to be regained and therefore construction timelines are now close to a year instead of the historical five to six months.
These issues have often led to builders canceling contracts or raising prices surreptitiously even after agreements have been finalized with buyers. If you are in a hurry to move into a new house, these factors can throw a spanner in your plans.
To minimize these types of surprises, it’s crucial to have a real estate agent represent you in a new home purchase. We can help negotiate better contract terms and advise you about the potential risks involved.
Existing Home
Shop for an existing home if you want to shortly move into a new home as soon as you have closed the deal. Though the time taken to complete the process is around 51 days, it may be a bit earlier or later depending on when you complete all the required formalities.
Cash buyers have a distinct advantage and can close even faster. If you are one of them, you have a distinct advantage in a competitive market and better bargaining power on the sale price.
LOCATION
This is the key to buying a house in several ways such as if you have children who need to go to schools nearby or you have to commute to work daily. Getting a house in an ideal location with the right amenities nearby will save you a lot of money and time in the long run.
New Build
Brand-new communities typically come up at the edge of a town which can lead to longer commute times. However, builders generally offer a lot of amenities that appeal to the modern homebuyers. Master-planned communities have their own schools and city-like centers with restaurants, retail stores, and office space. All these are just a walk away.
If you go for a high-end gated community, expect to get dog parks, tot lots, and hike-and-bike trails too. You move into a well-planned developed community with multiple features at a stone’s throw.
Existing Home
An existing home, on the other hand, will be located not on the fringes but in a town proper. There will be a deeply-rooted community with lots of mature trees and well-known schools. However, the infrastructure found in a new project might be lacking or dated.
Choose an existing home if you love this old-world charm very appealing but a new development might be your cup of tea if you prefer a more sleek and modern development.
MAINTENANCE
Are you a DIY enthusiast, or do you prefer a low-maintenance lifestyle? Set realistic expectations about how much time, effort, and money you want to devote to maintaining your next home.
New Build
When you build a home, everything is brand new. Therefore, in the first few years at least, you can expect less required maintenance and repairs. A 2019 survey found that millennials’ homebuying regrets often came down to maintenance issues, rather than other concerns.7 So if you would rather spend your weekends exploring your new neighborhood than fixing a leaky faucet, you may be happier buying a turnkey build.
That doesn’t mean, though, that a new home will be entirely maintenance-free. In fact, depending on the builder, you could find yourself repairing more than you expected. Some home builders have reputations for shoddy construction and subpar materials, so it’s important to choose one with a solid reputation. We can help you identify the quality builders in our area.
Existing Home
No matter how good a deal you got when you purchased it, you could come to regret buying an older home if it costs you heavily in unexpected maintenance and repairs. According to HomeAdvisor’s yearly True Cost report, home renovations have grown more expensive in recent years. For example, installing a new HVAC system could cost you $5,371 on average. And you can expect to pay nearly double that amount ($9,375) for a new roof.8
Fortunately, there are ways to prepare for these large expenditures. We always recommend that our buyers hire a certified home inspector, whether they buy a new or existing home. Once we have the inspector’s report, we can negotiate with the seller on your behalf for reasonable repairs or concessions.
ENVIRONMENTAL IMPACT
On a quest for greener living? If so, there are several factors to consider when deciding on your next home.
New Build
There’s a growing demand for energy-efficient housing, and many builders are rising to the challenge. Nearly 1 in 4 homes built in 2020 received a HERS (Home Energy Rating System) Index Rating by the Residential Energy Services Network. A HERS rating provides an index score that compares the newly-built home to those that were standard in 2006. The more energy-efficient the home is, the lower the score it receives.11
The average home rated in 2020 was 42% more efficient than those built in 2006 and 72% more efficient than a typical home built in the 1970s.11 So if energy efficiency is a top priority, a new home with a low HERS rating may be a good choice. You can also look for one that’s ENERGY STAR Certified, which means it meets a series of strict efficiency guidelines set by the Environmental Protection Agency. In 2020, only 7.9% of homes built in the U.S. received this designation.12
Existing Home
Of course, a basic tenet of sustainable living is: reduce, reuse, recycle. And since a resale home already exists, it automatically comes with a lower carbon footprint. Research has also shown that remodeling or retrofitting an older home is often greener than building one from scratch.13
With some energy-conservation effort and strategic upgrades, environmentally-conscious consumers can feel good about buying an existing home, as well.
DESIGN
Will specific design features influence your decision to buy a home? Read on to know what existing homes or new builds have to offer on this score.
New Build
Builders focus a lot on the latest design trends and visual details when constructing homes for sale. So, when you move in, all the features, appliances, and fittings will be shiny and perfect.
What you can expect from a new build are an open floor plan, a central kitchen island, and 9+ foot ceilings, which are must-haves for many modern buyers. What you should not expect are laminate countertops or main-level carpets, both of which have become dated for the modern homebuyer.
For homebuyers, new builds in a neighborhood often look like they have all rolled off the same assembly line. There are no unique and exclusive features separating one from another. After deciding on a new house though, you can negotiate custom features and upgrades to personalize the space to your preference and make it feel like your own.
Existing Home
In some of the most coveted neighborhoods, an older home with classic styling and character can be highly sought after. But unless the previous homeowners have invested in tasteful updates, an existing home is also more likely to look dated.
While some buyers prefer the traditional look and character of an older home, others crave something more modern. If that’s the case, we can help you find a resale home that leaves enough room in your budget to renovate it to your liking.
WHICHEVER PATH YOU CHOOSE, WE CAN HELP
When it comes to choosing between a new build or an existing home, there’s no one-size-fits-all answer. There are numerous factors to consider, and you may have to make some compromises along the way. But the homebuying process doesn’t have to feel overwhelming.
We’re here to help. And in many cases, our homebuyer guidance and expertise are available at no cost to you! That’s because the home seller or home builder may compensate us with a commission at closing.
Some new-construction homebuyers make the mistake of visiting a builder’s sales office or even purchasing a home without their own real estate representative. But keep in mind, the builder’s agent or “sales consultant” has their best interests in mind—not yours.
We are knowledgeable about both the new construction and resale home options in our area, and we can help you make an informed decision, negotiate a fair price, and avoid mistakes that can cost you time and money. So give us a call today to schedule a free, no-obligation consultation—and let’s start searching for your next home!
Sources:
- Reuters –
https://www.reuters.com/world/us/us-existing-home-sales-fall-august-inventory-declines-2021-09-22/ - National Association of Realtors –
https://www.nar.realtor/newsroom/existing-home-sales-ascend-7-0-in-september - KFVS 12 –
https://www.kfvs12.com/2021/09/22/covid-19-pandemic-affects-delivery-rate-building-materials/ - Rocket Mortgage –
https://www.rocketmortgage.com/learn/time-to-close-on-a-house - Real Assets Adviser –
https://irei.com/publications/article/master-planned-communities-changing-u-s-housing-trends-favor-investors-can-benefit/ - Builder Online –
https://www.builderonline.com/land/development/5-master-plan-trends-home-buyers-gravitate-toward-today_o - Bankrate –
https://www.bankrate.com/real-estate/homebuyer-regret-survey-may-2021/ - Home Advisor –
https://www.homeadvisor.com/r/true-cost-report/ - Roofing Calculator –
https://roofingcalculator.com/news/how-long-do-roofs-last - Plumbing and Mechanical Engineer –
https://www.pmengineer.com/articles/94873 - National Association of Home Builders –
https://nahbnow.com/2021/10/nearly-1-in-4-new-homes-in-2020-was-hers-rated/ - EnergyStar –
https://www.energystar.gov/newhomes/energy_star_certified_new_homes_market_share - Advanced Materials Research – https://www.researchgate.net/publication/271358381_Comparative_Study_of_New_Construction_and_Renovation_Project_Based_on_Carbon_Emission
- National Association of Home Builders –
https://nahbnow.com/2020/04/most-likely-and-unlikely-features-in-a-new-single-family-home/
