Tuesday, November 17, 2015 / by Marion Franke
When Buying a Brand New Home is a Bad Idea for You
There is nothing like walking into a brand new home and making it your own. The fresh smells of carpet, paint and brand new systems is hard to resist. But new homes are not always the best choice for buyers. Real estate agents represent buyers in selling both new and resale homes so they will not steer you to one or the other. Instead, they will help you take an objective look at the pros and cons of new construction.
The dollars and cents of your decision can be balanced into the decision, but often the deciding factors have to do with lifestyle and location. Famous author, Ric Edelman wrote the book “The Truth About Money”. After building two new homes, he purchased a resale to be fixed up. His comment was “One of the fundamental mistakes that consumers make is a rush to judgment. They often dismiss a new home or a resale when one is far more appropriate for them than the other.”
The tired mantra in real estate pricing is “Location…location…location”. It may be recited too often, but it is still very true and always will be. Established neighborhoods are more convenient. Schools, restaurants and shopping are already settled in and how the area will be developed is well-known. Don’t forget the cost of commuting if a new home is located away from your job or the services you need on a daily basis.
Comparisons of price can be deceiving. Resale prices can be lower – or higher – than homes in new communities. New home buyers should be careful to learn if the builder will pay certain closing costs that are customary in the resale market. Often, they will consider paying those costs as a concession rather than customary.
Generally, you have a number of “hidden” expenses in a new home that you will not incur for a resale. Those expenses range from towel bars to grass and everything in between. Remember that someone has been living in a resale home so you will find everything – well, livable. You will not have to rush out to find something to cover your windows or slosh through mud until your new grass becomes well rooted.
A new home community offers a sense of togetherness. Everyone has been drawn to the neighborhood for similar reasons. You have an opportunity to help create a community lifestyle that appeals to you. While this is wonderful, there is some risk of the neighbors not being on the same page with you. Also, developers and builders have been known to change the price range of neighboring homes to fit their own profitability. If you have a nice custom home, you have no power over the development if the builder decides to start selling homes for hundreds of thousands less.
Resale neighborhoods have been proven. You know what will be surrounding you. There may be more diverse homeowners in the area because some will be original to the community and others are moving in. You can expect a wider range of age groups, family sizes and even renters to be a part of the neighborhood.