Picture the home you'd like to live in. Chances are it bears a passing resemblance to the one you grew up in. A traditional “Leave It to Beaver” colonial or, perhaps, a brownstone townhouse straight out of “The Cosby Show.” Then again, maybe that is not what you are looking for. Maybe you'd prefer something newer, something with contemporary style, the latest amenities and a lot less maintenance. Or maybe you're not ready for that whole “3 bedrooms, 2 bathrooms and 1.5 kids" thing at all, and a condominium or co-op fits the bill. When it comes to home buying, one size does not fit all. But it does pay to understand the differences when it comes to options between an older house and a new construction.
They Said It
"We wanted to live in one of those cool, funky neighborhoods, but we didn't want to have to renovate. It just made more sense to get into a new place." – Jeff W.
New House, New You?
Unless you are looking at a custom-built house on an individual lot, most new homes are built in developments with a unified style. These developments can be as small as a cul-de-sac, or as massive as a former farm field filled with dozens, if not hundreds of homes. Built to the latest codes and standards, they tend to be contemporary styled, energy efficient and often are more expensive than resale homes of a similar size. Sometimes, these types of developments can represent a savings over established developments with existing homes. Either way, the decision about whether to forgo an establish community is worth taking time to consider. Specific details vary, of course, but consider the pros and cons.
Pros and Cons of New Construction
Some flexibility on design during construction phase
Cheaper to maintain (new appliances = fewer repairs)
Cheaper to operate (energy-efficient construction)
Cohesive neighborhood (consistent layout, common areas)
Frequently have a homeowners association (helps protect resale value)
Limited negotiating room on price
Potential for homeowners association dues
Frequently less character, or homogenous design
Frequently have a homeowners association (can put limits on how you use your property)
Of course, one home buyer's pro ("No one has lived in it before us, so we won't inherit any problems.") can be another's con ("No one has lived in it before us, so we have no way of knowing about any problems."). Fortunately, there are ways to make sure the house you're buying is really the house you want:
Check the builder's track record. What else has the company built? Were previous projects completed on time, on budget and without bad blood between the builder and buyers?
Walk the streets. If you live nearby and previous stages of the development are occupied, ask the residents if the builder did quality work and lived up to contractual commitments.
Picture your home, not the model home. You can certainly have the granite counters, surround-sound home theater and jetted tub you saw in the model home, but they're not included in the base price. You will pay extra for them.
Bring your own agent. If the builder has a real estate agent on site, the agent will be more than happy to help you. But, on-site agents work for the builders who hire them. Their best interests will be for the builder, not you.
Finally, consider the intangibles. Similarly styled homes attract like-minded buyers, and most developments are built with families in mind. Depending on your point of view, the consistency, conformity and kids playing in the street can be a blessing or a curse.
Existing /Resale Homes
They Said It
"We liked the charm factor of an older home -- even if it meant living in a construction zone for months during our renovation." - Leslie C.
Old = Charm?
With new developments springing up seemingly overnight, it's obvious that new construction is popular. And yet, most people buy a resale home; i.e., a home that someone else has lived in but is now on the market again. Call them used if you must — existing home sounds better — but they're the kind of houses that many people would like to call home.
Of course, there are pros and cons with existing homes, too. (That darling farmhouse with the big windows? It can be mighty drafty come winter.) Generally speaking, resale homes tend to be more available and less expensive than new homes, but they are also full of surprises.
The Pros and Cons of Resale Homes
Availability: More choices, more styles to choose from
Price may be more negotiable
Track record: Known issues will be revealed in disclosure documents
Could contain more charm and character
More maintenance: Things break or wear out
Less energy-efficient: More costly to operate
Dated design, older appliances and amenities
It's been lived in!
As with new construction, there are ways to make buying a resale home less scary:
Have the home inspected. You do not want to find out the foundation is cracked or the roof needs to be replaced after you move in.
Consider a counter-offer. If the inspection reveals fixable flaws, propose the seller do the repairs or lower the price.
Expect the unexpected. Pipes leak, electrical work becomes outdated and furnaces fail — get used to it.
Be honest with yourself. If major repairs are required, you'll either have to do them yourself or bring in the professionals. Some people can handle the disruption; others can't.
The bottom line on resale homes is this: Don't buy someone else's problems unless you can tackle the solutions. Find a house you like, consider its pros and cons — objectively, as well as emotionally — and think about the compromises you're willing to make. The more logically you approach buying the house, the more you're going to love living in it.