23 Jan The benefits and drawbacks of buying new construction
The benefits and drawbacks of buying new construction
Benefits of new construction
Many buyers are attracted to new construction because of the lack of near to short-term maintenance. The builders home warranty gives them peace of mind that the first few years will be worry free. Those buyers coming from a very old home who have experienced almost overwhelmed upkeep find it a relief. Also, the new layouts and designs are appealing. In addition, new homes have high efficiency mechanical systems and cost of utilities are generally less. Lastly, in many cases you have only lot taxes or partial taxes the first year of ownership. This can save you thousands of dollars.
Benefits of buying an existing home
An existing home normally is cheaper per square foot to buy. The curtains, landscaping and deck is usually already in place. A finished basement is common. And the lot is more mature with older, established trees. Also, the area amenities are in place and the community is more mature and established.
Do you do an inspection for both
Regardless if it is an existing home or new construction a home warranty is recommended. This includes a radon test. Many new homes have a passive system per city codes but need the fan and active reader to be on 24/7. New homes can have construction defects and I find a home inspection seems to always find something for the builder to address.
What is the best value?
That is a good question. And really depends on what your needs are. A newer home will have less house per square foot, and you have the costs of landscaping, curtains, finishing the basement, putting on a deck or patio, etc. But the maintenance and utilities are less. An existing home gives you more home for the money but will require more maintenance and upkeep. Many people enjoy home projects and the larger lots you normally get with an existing home.
How do I get financing for new construction?
That can be expensive. National builders have financing for the construction already included in the sales price. But many small and custom builders do not. So, the buyer needs to purchase the lot and get a construction loan. Then you get a traditional loan upon completion. This can cost a substantial amount of money and time to do. Go into this with your eyes wide open and get a firm idea of the costs involved. You might then be more able to compare a builder who has and doesn’t have financing included in the price. I have been through this process many times and can guide you through the choices. One option is rolling your construction loan into your end mortgage.
I hope you found this helpful
Reach out to me if you need suggested contractors. Or need my opinion of the cost to benefit for improvements
Please contact The Anderson Team with any questions. We are here to help educate you the process of looking for the right home.