Previously Owned vs New Construction
If you could only choose one, which of these homes would you prefer: Home #1) A home with a gorgeous chef’s kitchen and smart home technology, but a smaller plain dirt backyard, or Home #2) A home with a dated kitchen, but a resort style oversized backyard with pool? There’s no right or wrong answer, but these are one of the many pros and cons to buying new construction vs a previously owned homes. Let’s look at some of the other considerations when buying a new construction home or an existing home.
Perks to New Construction
Better Floorplans – Todays homes are built with today’s trends in mind. Homes that were built in previous decades were built with those needs in mind. While room segmentation was popular in the past, the open concept is what’s desired today. Mud rooms? No such thing 15 years ago, but now they are all the rage and you’ll see this feature in many new homes. Another trend we are seeing today is having the primary bedrooms downstairs (in two story homes). You’ll also be hard pressed to find a new floorplan that doesn’t feature a kitchen with an island that flows directly into a family room. That’s what buyers want these days, and buying new construction is a sure way to find a good floorplan.
Lower Maintenance – No doubt there will be maintenance on ANY home – new or old, it’s just part of being a home owner. However, a new home will have significantly less maintenance in comparison with an older home. The older the home, the more maintenance and surprise repairs that may come up. In addition, any reputable builder provides warranties to ensure problem free living while you get settled into your home for a period of time.
More Efficient – Todays homes are built with efficiency as one of the main ingredients. Higher rated insulation, superior performing air conditioners with hi-tech thermostats and dampening systems, low flow water fixtures, and low-e windows. This all translates to lower utility bills than older homes. If you want efficiency, new construction has you covered.
Amenities – New development in Arizona almost always include a Homeowners Association (HOA). While there is a cost associated with this, that also means you’ll often find amenities like pools, parks, basketball courts, BBQs, clubhouses, and gated entrances. While older amenity rich communities are out there, they are not nearly as common as in new developments. Homes built before the 1980s rarely include community amenities.
Personalizing –Many homes from a builder can be customized to a certain extent. Whether that be selecting flooring, cabinets, countertops, appliances, or adding an extended patio – there’s a long list of possibilities to craft a home that works just right for you. However, it varies greatly from builder to builder and many homes these days are “what you see is what you get”.
Pros of Existing homes
(aka, resale homes, aka “previously loved” homes)
Location – Most new home communities are built on the edges of town where land is more prevalent. Besides the occasional infill home (a knocked down older home that was rebuilt new), you generally don’t get a lot of opportunity to be right in the middle of town with a new construction home. Of course there are some exceptions, and just how far “out of town” you are willing to go is a subjective and a personal choice. As homes are built farther out of town, shopping, dining schools and more will typically follow. If you simply cannot budge on a specific location, or you want to be in the heart of the action, there are many more options for previously owned homes than new home developments.
Landscaping – In a previously loved home you’ll almost always have a completed/landscaped backyard. New homes rarely come with backyard landscaping (some builders include front yard, some don’t) Sometimes a basic backyard is put in, but most new homes will just have dirt, ready for you to finish how you wish. Landscaping or pools can get very expensive, so it’s important to remember to add that cost in to a new home. You can always do a low cost/low maintenance gravel cover as a quick and inexpensive option. Pools these days can easily be $50-$100k to build depending on extravagance, which is a substantial cost to consider.
Lot sizes – Generally speaking, previously loved homes are going to have larger lots than new home developments. This isn’t 100% true for all comparisons, but if the home is built before the 90’s then it’s quite likely the lot will be larger than today’s new construction communities. Many communities today offer several lot sizes, so you can pay to get onto a larger lot, but the average lot size has shrunk substantially in the last 40 years when in the metro area.
Pricing and Interest Rates Generally speaking a new home will be more expensive than a comparable existing home in the area. Even a fully remodeled comparable home that was built 20-30 years prior, is less expensive than a brand-new home.
However, right now in a higher interest rate environment, new home builders continue to offer reduced interest rate programs. This means the monthly payment on more expensive new home can be better than a less expensive older home. These rates are generally only offered on “quick move in” homes for primary owner occupants (not investors), but can be .5%-2% lower than market rate which can quickly translate to hundreds of dollars per month. Its no wonder new homes have soared in popularity the last year.
There are many other nuances that are different when buying a new construction vs a previously loved homes. If you have any additional questions regarding buying new vs a resale home, don’t hesitate to ask. And remember, if you are thinking of buying new construction, always talk to me before stepping foot into a new home community sales office– Your wallet will thank you!
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