Some home buyers might be faced with a simple question; is a new home better than an existing home? The answer is that there is no universal answer. There are however advantages to both new and existing homes. In some cases, they are obvious; but many differences are not so apparent. One of the biggest questions surrounds timing; new homes can take longer than six-eight months from start to finish. A lot can change in that time frame…lifestyle, rates, jobs….and that builder and new home contract doesn’t care.
Why a New Home is Better than an Existing Home
Buyers love new; new cars, new clothes and new homes. What’s not to like? A new home allows a buyer to make choices that typically can’t be made when buying an existing home. There are clear advantages:
- It’s new. Move in and enjoy the house
- It’s financially stable. There is virtually no chance of a major repair expense sneaking up
- It’s current. A new home will have the latest designs, floor plans and features.
- Smart homes, wireless systems and other smart technology
- It’s energy efficient. From design and systems it will function most efficiently
- It’s easy to upgrade. Options can easily be added to the cost and mortgage
- Easier mortgage. Many affiliate lenders offer incentives and make great efforts to approve buyers
- New New New. Everyone is a “new” neighbor, the community grows from the ground up
No doubt, it’s easy to walk through a model home and get hooked. That same “new car smell” that seduces so many “lookers” can hit new home buyers as well. Go in for six or seven hot dogs and leave with a 700K obligation, not good. That happens more than expected; self-control and discipline are essential. And never – ever – go in without a buyer’s agent when building a new home. There is NO cost for this guidance and an experienced buyer’s agent will prevent problems. New builds can be a nightmare if not well managed, see how new home buyers walk into trouble .
Why an Existing Home is Better than a New Home
New is appealing but there’s much to be said for an existing home. While not as customizable, the typical existing home has the “heavy lifting” competed and tends to be in an established area.
- Value. In most cases, there’s more bang for the buck with existing homes
- More negotiable. Builders care about profit and rarely cut price. Owners ready to sell tend to be more flexible
- Larger lots. Developers go with minimal lot size and often do away with amenities in favor of more homes
- Quality material and design. Across the board, from copper pipes to real hardwood, existing homes tend to have materials considered “upgrades”. Most new communities build just a few floor plans and make subtle facade changes, not true design changes
- Established. No construction traffic, no increased activity, mud slides, garbage and mess
- Big ticket extras. Most existing homes will have finished basements, hardscapes, pools, etc
- Closer to things. Other than in-fill builds, the cost of land means new communities will be in outlying areas
- Landscaping. Mature trees, bushes, grass both at the home and in the community
- Predictable, fewer headaches. No builder excuses, builder issues, delays, call backs and surprises
New homes are not a clean slate for buyer, options tend to be limited as builders want to keep it simple. Those that make changes will charge a pretty penny. Existing homes tend to be much more of a “what you see is what you get” and that can be an advantage for many.
The Atlanta area remains a perfect market to study when it comes to new vs existing. During the real estate boom years, developments were spreading like wildfire in all directions. With drive times from downtown pushing two hours, communities in all directions were pitched with “value and lifestyle” as the lead benefits. That was palatable until $4/gallon gas, hours were lost in traffic and the bubble burst. The results were thousands of lots back to the banks, unfinished communities, unfinished municipal and commercial projects and a crushing loss of value. That “distance, area reputation, historical pricing trend” research cannot be overstated; like many markets the Metro Atlanta is a series of hundreds of micro markets but pretty predictable when you know how and where to look.
Home buyers must be happy with what they purchase; buying a home is just too significant an event to approach casually. You will be selling that home one day – perhaps sooner than expected so make certain to “buy right”. Study the options, the budget and most of all, select your agent like you would a lawyer or doctor. Take a few minutes, Google them, check them on Zillow and learn how to properly select a real estate agent. More than you realize depends on them and they can be the difference between a pleasant experience and a nightmare.