New Build or Existing Home:Which One Is Right for You? Homebuyerstoday are facing a huge dilemma. There simply aren’t enough homesfor sale.1Nationwide,there were 1.27 million active listings in
New Build Or Existing Home Which One Is Right For You
Dated: November 11 2021
New Build or Existing Home:Which One Is Right for You?
Homebuyerstoday are facing a huge dilemma. There simply aren’t enough homesfor sale.1
Nationwide,there were 1.27 million active listings in September, down 13% fromthe previous year. According to the National Association of Realtors,that’s about 2.4 months of inventory, which is far less than thesix months that is generally needed to strike a healthy balancebetween supply and demand.2
Giventhe limited number of available properties, if you’re a buyer intoday’s market, you may need to expand your search to include bothnew construction and resale homes. But it can feel a little likecomparing apples to oranges.
Let’stake a closer look at some of the factors you should take intoaccount when choosing between a new build or an existing home.
Howquickly do you want (or need) to move into your next home? Yourtimeframe can be a determining factor when it comes to choosingbetween a new build or resale.
Ifyou opt for new construction, you may be surprised by how long youhave to wait to get the keys to your new digs. Currently, many homebuilders are dealing with unique challenges brought on by theCOVID-19 pandemic, including rising costs, labor and materialshortages, and shipping delays. While historically it took aroundfive to six months to build a home, many builders are now reportingconstruction timelines closer to a year or more.3
Theseissues have led some builders to cancel contracts or raise the priceon unsuspecting homebuyers long after agreements were signed.Unfortunately, this scenario can throw a major wrench in your movingplans and significantly delay your timeline.
Tominimize these types of surprises, it’s crucial to have a realestate agent represent you in a new home purchase. We can helpnegotiate better contract terms and advise you about the potentialrisks involved.
Ifyou're in a hurry to move into your next residence, then you may wantto stick to shopping for an existing home.
Youcan typically move into a resale home as soon as you've closed thedeal. The average time it takes to close a home purchase is around 51days, but it can vary based on loan type and market activity.4
Ifyou need to move even sooner, it’s sometimes possible to closefaster, especially if you’re a cash buyer. In fact, many sellersprefer a quick closing, so it can give you an advantage in acompetitive market.
Fromcommute to construction to amenities, there’s a lot to considerwhen choosing your next neighborhood.
Witha brand-new home, you're more likely to move into a neighborhoodthat's located on the edge of town and is still undergoingdevelopment.5 This could mean a longer commute and ongoingconstruction for some time.
However,new developments can also offer a lot of amenities that appeal tomodern homebuyers. Water features, hike-and-bike trails, tot lots,and dog parks are just a few of the enhancements we’re seeing popup in master-planned communities across the country. And some featurenew schools and their own urban-like centers with restaurants,retail, and office space.6
Anexisting home is more likely to be located close to town in aneighborhood with mature trees, established schools, and adeeply-rooted community. As a result, you may find the neighborhood'strajectory to be more predictable than an up-and-coming area.
Butthe amenities may be lacking and the infrastructure dated whencompared to newer communities. And while some homebuyers love thecharm and eclectic feel of an older neighborhood, others prefer thesleek and cohesive look of a newer development.
Areyou a DIY enthusiast, or do you prefer a low-maintenance lifestyle?Set realistic expectations about how much time, effort, and money youwant to devote to maintaining your next home.
Whenyou build a home, everything is brand new. Therefore, in the firstfew years at least, you can expect less required maintenance andrepairs. A 2019 survey found that millennials' homebuying regretsoften came down to maintenance issues, rather than other concerns.7So if you would rather spend your weekends exploring your newneighborhood than fixing a leaky faucet, you may be happier buying aturnkey build.
Thatdoesn't mean, though, that a new home will be entirelymaintenance-free. In fact, depending on the builder, you could findyourself repairing more than you expected. Some home builders havereputations for shoddy construction and subpar materials, so it'simportant to choose one with a solid reputation. We can help youidentify the quality builders in our area.
Nomatter how good a deal you got when you purchased it, you could cometo regret buying an older home if it costs you heavily in unexpectedmaintenance and repairs. According to HomeAdvisor's yearly True Costreport, home renovations have grown more expensive in recent years.For example, installing a new HVAC system could cost you $5,371 onaverage. And you can expect to pay nearly double that amount ($9,375)for a new roof.8
Fortunately,there are ways to prepare for these large expenditures. We alwaysrecommend that our buyers hire a certified home inspector, whetherthey buy a new or existing home. Once we have the inspector’sreport, we can negotiate with the seller on your behalf forreasonable repairs or concessions.
Ona quest for greener living? If so, there are several factors toconsider when deciding on your next home.
There’sa growing demand for energy-efficient housing, and many builders arerising to the challenge. Nearly 1 in 4 homes built in 2020 received aHERS (Home Energy Rating System) Index Rating by the ResidentialEnergy Services Network. A HERS rating provides an index score thatcompares the newly-built home to those that were standard in 2006.The more energy-efficient the home is, the lower the score itreceives.11
Theaverage home rated in 2020 was 42% more efficient than those built in2006 and 72% more efficient than a typical home built in the 1970s.11So if energy efficiency is a top priority, a new home with a low HERSrating may be a good choice. You can also look for one that’sENERGY STAR Certified, which means it meets a series of strictefficiency guidelines set by the Environmental Protection Agency. In2020, only 7.9% of homes built in the U.S. received thisdesignation.12
Ofcourse, a basic tenet of sustainable living is: reduce, reuse,recycle. And since a resale home already exists, it automaticallycomes with a lower carbon footprint. Research has also shown thatremodeling or retrofitting an older home is often greener thanbuilding one from scratch.13
Withsome energy-conservation effort and strategic upgrades,environmentally-conscious consumers can feel good about buying anexisting home, as well.
Openfloor plan? Kitchen island? High ceilings? Must-have design featurescould drive your decision to build or buy resale.
Witha new home, you can bet that everything will look shiny and perfectwhen you move in. Builders tend to put a lot of emphasis on visualdetails and follow the latest design trends. For example, newly-builthomes are likely to feature an open floor plan, central kitchenisland, and 9+ foot ceilings, which are must-haves for many modernbuyers. They are also unlikely to feature carpet on the mainlevel or laminate countertops, both of which have lost mass appeal.14
However,some buyers complain of the cookie-cutter feel of new homes sincethey are often built with a similar aesthetic. That doesn't mean,though, that you can't incorporate your own style. We can help younegotiate custom features and upgrades to personalize the space andmake it feel like your own.
Insome of the most coveted neighborhoods, an older home with classicstyling and character can be highly sought after. But unless theprevious homeowners have invested in tasteful updates, an existinghome is also more likely to look dated.
Whilesome buyers prefer the traditional look and character of an olderhome, others crave something more modern. If that’s the case, wecan help you find a resale home that leaves enough room in yourbudget to renovate it to your liking.
WHICHEVERPATH YOU CHOOSE, WE CAN HELP
Whenit comes to choosing between a new build or an existing home, there’sno one-size-fits-all answer. There are numerous factors to consider,and you may have to make some compromises along the way. But thehomebuying process doesn’t have to feel overwhelming.
We’rehere to help. And in many cases, our homebuyer guidance and expertiseare available at no cost to you! That’s because thehome seller or home builder may compensate us with a commission atclosing.
Somenew-construction homebuyers make the mistake of visiting a builder’ssales office or even purchasing a home without their own real estaterepresentative. But keep in mind, the builder’s agent or “salesconsultant” has their best interests in mind—not yours.
Weare knowledgeable about both the new construction and resale homeoptions in our area, and we can help you make an informed decision,negotiate a fair price, and avoid mistakes that can cost you time andmoney. So give us a call today to schedule a free, no-obligationconsultation—and let’s start searching for your next home!
National Association ofRealtors-https://www.nar.realtor/newsroom/existing-home-sales-ascend-7-0-in-september
Plumbing and MechanicalEngineer -https://www.pmengineer.com/articles/94873
National Association of HomeBuilders-https://nahbnow.com/2021/10/nearly-1-in-4-new-homes-in-2020-was-hers-rated/
National Association of HomeBuilders-https://nahbnow.com/2020/04/most-likely-and-unlikely-features-in-a-new-single-family-home/
Otniel Gil has been a top agent in Treasure Island, FL real estate for over 10 years. Prior to entering the real estate business, he was in the insurance & wealth management industry and his backg....
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