So You Want To Buy a New Construction Home??? Here Are the Pros & Cons
Congrats, you finally did it! After months of getting your credit in order and saving for a down payment, and narrowing down which neighborhood you want to plant some roots in, you have a pre-approval letter in hand and your home-buying journey is starting to feel…real. Look at you! I see that sly smile on your face, that spring in your step – nothing left to do but pick a home, dot some i’s & cross some t’s, and start shopping for new furniture.
Slow your roll, my friend. Particularly with the surge of new development in parts of Philly, there is one important decision left for you to make before you start hitting up the open houses.
Some people like new, shiny things and want them to be ‘untouched’ by others and in pristine condition. Others like a more worn-in look and feel, either aesthetically or for the idea of using their imagination and some elbow grease to improve upon something that already exists. When looking for a new home, buyers often fall into these two categories, but many don't have a strong feeling either way. In addition to the many other decisions to make, any prospective buyer must choose whether to buy a newly constructed home or pre-existing one. While there are pros and cons to purchasing a newly constructed home, ultimately the decision will come down to personal preference, budget, and timing, among other factors. So, before you get out there, let’s take a look at the pros and cons of purchasing a newly constructed home.
Do You - Personalize & Customize
Don your architect/interior designer cap and create the home of your dreams! Customizing your new home is one of the most exciting parts of building new construction. A custom, tailor-made home provides a unique opportunity for builders to showcase their creative talent and craftsmanship. It also allows you an opportunity to express yourself with finishes that reflect your tastes, preferences, and personalities. With existing homes already built, it is not possible to choose custom flooring, lighting, cabinet color/style, etc. without taking on a renovation project. If personalizing your next home is at the top of your wish list and doing major upgrades and remodeling is at the bottom of your list, then a new or pre-construction home purchase that allows you to choose finishings and add upgrades may be very appealing for you.
Newly constructed homes offer the most sanitary solution possible for the cleanliness-inclined. Moving into a new home knowing that no one has ever lived there is a great feeling. Brand new houses provide all of the latest materials and you will be the first to use everything. We are not saying that new is perfect but overall, living in a brand new house that no one has ever lived in will eliminate any unwelcome surprises you might find when buying an existing older home.
Put the Toolbelt Away (For Now, at Least)
Architecturally speaking, we can say that an existing resale home is like a blank canvas. It’s just waiting to be created as the buyer sees fit. When you purchase your own new and improved masterpiece, there's no need for updating because the products used are taken from the current design trends. When purchasing an existing resale house, the previous owners could have picked out the design choices decades ago, such as colors or flooring patterns (shag carpeting anyone???). Many times, this leaves the new homeowner with the desire to update certain features. When building a new home with everything you want from scratch, there are many design choices that you get to make on your own. This pro is a significant benefit to buying a new home over an existing one.
New construction homes also have less maintenance than older existing homes. You won’t have to worry about your roof leaking when it rains or your air conditioner breaking in the middle of summer. You can enjoy all the perks of living in a brand new home without maintenance headaches. When things do break down, they are typically covered by a manufacturer's warranty or a limited builder warranty. Even though a new construction home has brand new everything, we recommend getting a third-party home inspection anyway. Most people will only get a home inspection on pre-existing homes. After the cost of building, who wants to pay for a home inspection? In reality, a home inspection costs around $350 to $500. It can save you ten times that amount if anything is found to be defective.
The new energy-efficient houses that are being constructed today can make everyday living much more manageable. Rising utility costs are a major concern nowadays and the efficiency benefit from new construction causes utility costs to be lower than average. This benefit causes homeowners to worry less about their electricity and gas bills every month. There are many reasons why these new construction houses are so energy-efficient. A few reasons include vinyl windows, new door trim and seals, and better insulation between walls to keeps out drafts. These products can reduce the need to heat and cool your home by a significant amount. The savings help to offset the higher cost of a new home in the long run.
This Warrants a Look
When working with a builder, they will typically offer home builder warranties that you could never get on a pre-existing home. Sure, you can buy a home warranty later, but that only covers a small number of items. Your homeowner’s insurance will cover significant events, but a builder’s warranty goes beyond all of that. Not all home builders are equal. Their warranties can vary dramatically. It’s important to check reviews on the builder you’re considering by looking at their profile on the Better Business Bureau (BBB) website and asking around the community for additional feedback.
All About the Benjamins
On average, it cost around 20% more to buy a new construction home than to buy an existing one. This number changes based on the area and price range of the home and many people accept the higher prices because of all the pros mentioned above. You will have to determine whether a 20% increase in price is worth it to you, based on your needs and budget. When buying an existing home, you might be able to buy it for the set price without any other expenses. Buying a new construction home may come with unforeseen upgrade costs. It is important to know what comes standard vs. what is an upgrade. Model homes that dazzle typically show off 20-50K of upgrades. Sneaky, right? Often, upgrades we love are not included, such as recessed lighting packages, finished basements, wet bars, gourmet quality kitchens, and varying grades of flooring and tile materials. Be sure to ask questions and crunch your upgrade numbers!
When the Waiting is the Hardest Part
Many people find buying an existing home is the best option because of the unpredictable home-building timeline. With a new house, you have to wait 3-12 months before moving in. This issue can be a challenge for people who are in temporary housing and need to get out of their current situation as soon as possible. If you buy an existing home, you can move right into your new place within 30 to 45 days of signing the sales contract! This ease of purchase makes the new build process less appealing if you need to buy a house right away.
All Builders Are Not Equal
The experience of building new construction varies among buyers because the policies, skills, and options available vary among builders. While the majority of builders do quality work, there remains the chance that you’ll come across a builder with less proven experience, and you need to be wary about who you choose to build with. When choosing a builder for your new construction home, look beyond the pictures on their website and seek out more information to ensure you’re making the right choice. Check out homes they’ve completed, talk to homebuyers who have previously built with them, and make sure there are no major complaints filed against them. You shouldn’t have trouble finding a great builder for your home; you just have to do the work to make sure whoever you go with will deliver what you’re looking for.
Less Room for You to Show Off Your Negotiating Skills
When you’re buying a pre-owned home, the price is set by the market and by the previous homeowner, who may or may not understand the true value of their home. For that reason, negotiating is just part of the process, and it’s totally rational to expect that you’ll pay less than the listing price in a buyer's market or, conversely, pay more than the asking price in a seller's market. When you’re buying new construction, however, what you see is typically what you’re going to pay, plus any upgrades. Builders don’t like to lower the base prices on homes but they may offer some discounts or financial incentives, so look for those instead.
Work With an Agent Who Gets It
When deciding whether to purchase a new construction home, it comes down to figuring out if it’s the right choice for you by gathering all the facts, doing your research, and thinking clearly about what you want in a home, both now and in the future. It is strongly recommended to utilize the expertise of a trusted real estate agent so that you have someone helping you advocate for your interests. The more you know going into the process, the better you’ll be able to navigate the sometimes tricky process of building a new construction home.
We Got You!
Whether you are looking to buy, sell, or invest in real estate in 2022, our team is ready to make your dreams come true. At The Somers Team, it is our collective goal to deliver an unmatched 5-Star Experience to each and every client. No two people or transactions are alike and we strive to tailor your home buying process to meet your needs and expectations.
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