Should you buy a new construction home or an existing one?

There are lots of questions that come to mind when you first begin your hunt for the “perfect” home. Do you want a home in an urban area or would you prefer the suburbs? How many bedrooms will you need? Is a yard important to you? Would you like to live in a brand new home or would you prefer an existing home? With all these questions and more, no wonder the hunt for the “perfect” home can seem overwhelming. The first thing you should probably decide is whether or not you want to live in a new construction home or an existing home. We put together some pros and cons to help you decide. While these don’t cover all the pros and cons for both, they could be beneficial in starting your own list.

Should you buy a new construction home?

New construction homes have appeal to a wide variety of home buyers. The thought of being able to create your “perfect” home from the ground up is very appealing. From how many bedrooms will be built to whether or not the kitchen will have granite countertops the choices are all yours. Many new construction homes are built within a large subdivision that also contains amenities that could enhance your lifestyle. Things such as parks and playgrounds for families with children to tennis or basketball courts and running trails to encourage active lifestyles are sometimes incorporated into the subdivision master plan.

The new home itself should be more energy efficient. With up-to-date, high efficiency HVAC systems, Energy Star appliances and new construction materials that are designed for optimal energy efficiency you might find yourself saving on your utility bills. You get to choose everything in your home from the flooring, to whether or not to put in a garden tub to choosing an open floor plan or adding an extra bedroom or office. Let’s not forget the builder warranty that covers anywhere from one year up to ten years, depending upon the builder and the item.

Building your new home from the ground up could be very appealing.
Building your new home from the ground up could be very appealing.

Newly constructed homes also have several cons. One of which is builder incentives. Builder incentives are often offered to the home buyer. However, they may come with a guideline that you are unwilling to compromise on, such as, a percentage off the pricing but only if you use their lender. Your lender may have a better interest rate than theirs. Which one will save you the most money in the long run? New construction homes usually have homeowners associations (HOA’s) that have restrictions for the community. These restrictions can be anything from the color you paint your home to what types of plants you may plant in your front yard. Be sure to read through all the paperwork before you leap into homeownership.

Landscaping, yes, you can choose from the builder’s selection for your front and back yards. However, the trees are not yet mature in most cases. So, don’t expect too much shade to come from them for several years.

Are you better off buying an existing home?

 This depends on what you are looking for in a home. Existing homes come in so many varied styles and sizes. Much more than the typical homebuilder could or would be able to offer. They usually have larger lots. New subdivisions are built to fit as many homes as possible within them in order to make the builder the maximum amount of profit. An existing home may also have more square footage. Over the past year, home builders have been scaling back on the square footage of homes to make them more affordable for a wider range of buyers. Existing homes tend to have bigger lots with larger yards. These yards tend to have more established trees and landscaping. This provides more shade and helps with utility costs especially in the areas of the country that experience high temperatures for large portions of the year.

While an existing home may be bigger it may not be as energy efficient as a newly built home. There may be some exceptions where homeowners may have upgraded the appliances and windows; but this is not always the case. Also, if you would like to remodel portions of the home, the current load bearing walls may limit what can be done. As an existing home ages it begins to require more maintenance. You may find yourself in need of a new roof or new exterior paint sooner in an existing home.

What about pricing?

According to the US Census Bureau the newly constructed home median sales price in July 2017 was $313,700. This is a slight increase from the July 2016 median sales price of $295,000. This July the average sales price for new construction homes was $371,200. While in July of last year the average sales price for a new construction home was $355,000. The National Association of Realtors(NAR) is reporting the existing home median sales price in July was $258,300 up 6.2% from July 2016.  July was a hot month for home purchases. 33% of the sales were from first time home buyers. 62% of homes purchased in July were financed with 6% or less down according to NAR’s Realtors Confidence Index.

Finish putting your list together and then decide for yourself which is better for your lifestyle and budget; a new construction home or an existing home. Buying a home could seem daunting at times but with the right planning and a team of professionals by your side it could be easier than you think.

If you are thinking of purchasing a home, talk to the lending experts at Lenox/WesLend Financial or call 844-225-3669. As heard on the radio, it’s the biggest no-brainer in the history of mankind. 

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