Is New Construction A Better Buy?
Any home search is plagued with concerns. Is the home affordable? Does it offer the right living environment for your needs? Will the location be profitable when you sell in the future? These are all things that cross a home buyer’s mind. However, there is one more decision buyers tend to have difficulty with: Is a new construction home a better buy?
While there is no straight answer, new construction does offer certain benefits over re-sale homes. But from my personal experience (of running a construction company), if you find a home for re-sale that you like, you will typically get a better deal. Here’s why:
Self-Restraint Isn’t Easy
Every home purchase is marked by its budget. Can you afford the home you want? Oftentimes, I see buyers having trouble with self-discipline when looking at new construction homes. For example, it doesn’t take long to start talking about upgrades with the builder (or agent). At first, it doesn’t seem like a bad idea to go with tile in the bathroom over vinyl because it’s only $800. Or it’s easy to upgrade the cabinets for $1500.
When you’re looking at the home purchase, you see that 6 digit number and think a little bit extra isn’t that much. But when you add all your upgrades up, they can cost a lot. Just recently, I had a client who decided to build their dream home, and they were going to get what they wanted. However, that all changed the day they finished adding up everything. In the end, they had to go back and eliminate things they didn’t have to have.
Negotiations are Open
Typically, with new construction homes, the price you see is the price you have to pay. There is little wriggle room when negotiating the price with the builder. That’s what the home is appraised at and that’s what they are looking to get in return investment. However, if you’re purchasing a re-sale home, you will often find the seller open to negotiations. If the market isn’t in their favor, you can negotiate for a reduced price or added incentives, like closing costs paid in full.
Re-Sale Homes are Established
New construction homes have one primary benefit: You are the first to live in the house. Some home buyers appreciate and value that. However, with buying a new construction home could mean you’re buying into a neighborhood still under construction. There may not be many shops around. Amenities might not be available yet.
With re-sale homes, you can see that you’re buying into an established neighborhood. Everything is settled around, including the home. The area and property will generally have more charm, which is something to consider on your next home purchase.
Buying a Home
Finding the right home depends on what you’re looking for and the right opportunities lying around. New construction homes still have many benefits for home buyers, but there are plenty of deals to be found with re-sale homes. If you’re still on the fence on which property you should go for, feel free to contact me. I would be happy to discuss the benefits and drawbacks with you.