A new construction home vs an existing home is something many buyers take into consideration when buying a home. In this post, we will compare and contrast the two types of homes and provide you with some key considerations that will help you make the best decision for yourself.
New Construction Homes
Before we get started, it’s important to understand that not all new construction homes are created equal. There are a few key differences between a new construction home and an existing home that buyers should be aware of. If you are considering purchasing a home, be prepared with questions to ask when buying new construction.
New construction homes also tend to be more expensive than existing homes, because the home has not been subject to the depreciation and inflation that naturally occurs over time.
Another important consideration when buying a new construction home is the fact that you may not be able to change your mind about the purchase. With an existing home, you have the opportunity to sell the home at any time for any reason, whether you’re happy with the purchase or not.
Now that you know a little more about the benefits and drawbacks of buying a new construction home vs. an existing home, it’s time to get started comparing the two. In this blog post, we will compare the following two homes: a new construction home and an existing home. You may ask yourself if it is easier to buy a new construction home,
Pros of New Construction
New construction vs existing home typically offers a number of benefits that make it an attractive option over purchasing an existing home. One major advantage is that new homes are often built with updated features and materials, which can make them more comfortable and energy-efficient. Additionally, since new homes are typically constructed in a more timely manner than older homes, they may be available at a lower price point.
Select Your Lot
When you decide to buy new construction vs existing home you select which lot is most appropriate. In real estate, the most important consideration of a piece of real estate is the location. You may decide to select a larger parcel of land or a corner lot. Other options include selecting a lot that is closest to the community amenities in a gated community.
You can also choose to buy a lot that is in a desirable location but may be more expensive. Some buyers may want a corner lot or a lot that is close to the community amenities.
Control Your Home’s Characteristics
When you buy a new construction home, you have the opportunity to choose your home’s exterior and interior finishes. You can select from among wood, stucco, tile, and metal siding. The exterior dimensions of the home are also limited only by your imagination.
With a new construction vs existing home, you can customize the exterior and interior of the home to your liking. Generally speaking, you will be able to select the finishes when building your new home. This is not always possible with an existing home, as exterior and interior features may be predetermined by the builder.Pros and Cons of New Construction Home Vs. Existing HomeClick To Tweet
New construction homes are built to be energy efficient. This means that your home will likely use less energy in the winter and more energy in the summer. Windows will be new and insulated so that your utility bills will be cost-effective and energy efficient. Additionally, appliances that are utilized in new construction are energy efficient as well. New home constructions have many green home features which all benefit the environment.
New home developments are utilizing drought tolerant landscaping because there are severe droughts in different parts of the country such as California, and Nevada. These landscapes utilize way less water than a traditional garden.
Cons of New Construction
There may be limited availability. There can be disadvantages to buying a new home. New construction homes are often in high demand and can take longer to sell than an existing home. If you’re looking for a quick purchase, an existing home might be a better option.
The cost of a new construction vs existing home will generally be higher than an existing home. This is because the costs associated with building a new home (such as materials and labor) are not taken into account when prices are set for new homes.
The price point for a new construction home is typically higher than an existing home. This is because the home has not been subject to depreciation and inflation over time.
However, there are some caveats to consider when choosing new construction over buying an existing home. First, new homes may not be available in all neighborhoods, so you may have to compromise on your desired location or the best neighborhood you were hoping for. Additionally, since new homes are built to order rather than going through a pre-existing stock of units, you may end up paying a bit more for your home
Costs of New Construction
When comparing a new construction home to an existing home, the key distinctions are the price tag and the ability to change your mind about the purchase.
When it comes to price, a new construction home will typically be more expensive than an existing home that is 5 years old. This is because new construction homes don’t experience the depreciation and inflation that occurs over time.
New Construction Homes May Have Additional Taxes and Bonds
Many new construction homes may have bonds or Mello Roos associated with the cost of the new development. The bonds will pay to support the infrastructure such as the roads and schools for the children.
Most new construction home developments are in an HOA or homeowner’s association. As a home buyer, you will have to include the costs of the HOA and any additional tax associated with the home purchase.
If you are buying a new construction home, be sure to ask about any added taxes or bonds that may apply. These can amount to a significant expense, so it is important to know about them before purchasing.
Pros of Purchasing an Existing Home
There are many benefits to purchasing an existing home. One strong benefit is that you will know and understand how the neighborhood has performed with regard to home appreciation in the past. Existing homes also have schools in place, and you can look up how well the school has done in the past.
If you like the area in which the home is located, you may want to consider an existing home. The down payment requirements are usually lower for an existing home than for a new construction home.
Another benefit to purchasing an existing home is that you are buying into an already established community. This can be a major factor in your decision-making process, as you will know what to expect in terms of both the quality and layout of the home.
With established neighborhoods, you will be able to learn about the existing schools that the children attend. It is easy to look up websites on how they are rated.
New construction homes appear to be cookie cutter with similar facades. An existing home will have its own unique architecture that a buyer may find appealing. The attention to detail and the craftsmanship of an existing home may be difficult to find in newer homes. If the character of a home is appealing, then purchasing an existing home may be the best choice.
New construction homes can often be built on undeveloped land and lack mature landscaping. This can make it difficult to find a home that is in a desirable location. If you are looking for a home that will not be impacted by new construction, then purchasing an existing home may be the better option.
Existing neighborhoods have mature landscaping with tall trees that are appealing. There are emotional benefits from living in a home that is surrounded by mature landscaping and greenery.
Cons of Purchasing an Existing Home
When you purchase an existing home, you may be able to use the equity in your house as collateral for a loan. However, this type of loan will have higher interest rates and require a longer repayment period than a mortgage loan would.
The disadvantages of buying an existing home include the time it takes to sell the home; the depreciation and inflation that naturally occurs over time; possible hidden problems with the property; and maintenance costs that may increase over time.
In addition, if you are not familiar with fixing broken windows, leaking roofs, or other basic repairs, you may want to consider purchasing a new construction home instead.
Another downside to purchasing an existing home is that it may be difficult to get your hands on a property that meets your needs. It can be harder to find foreclosed properties and homes that are being sold as fixer uppers. Additionally, if you are looking for a new construction home, you will have more choices in terms of design and features.
So, which home is right for you? If you are looking for a home that is brand new and does not have any wear and tear, then a new construction home is an option for you. If you are looking for an opportunity to sell your home at any time, or if you are looking for an affordable home that you can move into right away, an existing home is a better choice. Buying new construction vs existing is a consideration for anyone who is considering purchasing a home.
About the Author
The article “Pros and Cons of New Construction Home Vs. Existing Home” was written by Sharon Paxson, a top Newport Beach Real Estate Agent. With experience beginning in 2005, representing buyers, sellers, and landlords, we welcome the opportunity to share our expertise with you and guide you through your real estate transaction.