Should I buy a new home or a resale?

When you're ready to buy a home, there are a number of considerations; one being whether to buy a new or used home. Input to help make this decision is included in the attached feature story. | Photo by Feverpitched, iStock / Getty Images Plus, St. George News

FEATURE — When you are looking to buy a home, there are several things to consider. One of the first is to determine if you want to buy a newly built home or if you want to buy a resale.

A qualified real estate broker can help you explore your options. Following are a few things to consider.

Home warranty

Home warranties are always available. Most builders will offer a 2/10 warranty, meaning two years on the inside and 10 years on the structure.

Resales have similar warranties available, but the coverage is not as extensive. The most commonly selected home warranty for a resale is one year.

All home warranties can then be extended at the end of the purchased policy, and the price is determined by square footage.

Selection

When you purchase a resale, you have to choose what is already there.

New homes offer a variety of floor plans and options so that you can make the home your own. If you need to see what it will look like, larger builders have models. When working with a smaller builder, ask them to see one of the homes they previously built.

Interior design

In a new home, you will often need to pick out all of the blinds, carpet and interior colors, along with planning to complete your back landscaping. For some, this is the fun part of the process. For others, this can be daunting. Budget is important to consider in this process. Many of the options will have an added expense. When choosing a new build, be sure to consider what you qualify for when you choose your base floor plan.

In a resale, your sellers sometimes offer an allowance” or sometimes they will let you pick the flooring or paint and they will make the changes prior to close.

Remember to work closely with your lender to see what types of restrictions there may be with your loan type.

Move-in date

When you purchase a resale, most contracts are designed to close between one week and two months, depending on your financing situation and the personal situation of the buyer and seller.

If you are planning further ahead, new builds have a little more flexibility.

Larger builders work in phases. They will build out certain sections of a community first then move to the next. If you know when you would like to move in, you can choose the phase that best fits your needs. And if you are purchasing a lot and having a smaller builder complete the construction, you can sometimes plan several years out.

Dust and appreciation

New homes do mean construction areas, lots of noise and lots of dust. If you are building in a subdivision, it is likely that new homes will be built for a few years after you move in. Be sure to ask about what is being built around you.

And when looking for a resale, look around to see if there are any empty lots that might have homes built on them later.

The biggest benefit to dust is that it is usually accompanied by appreciation. The largest increase in appreciation in a subdivision is typically seen in the first five years. So if you can stand a little dust, you will likely see a financial gain.

Personal preference

In the end, it is possible to get what you want with either a new home or a resale, and it comes down to personal preference. Many like the charm of a resale, while others prefer to start with something that is entirely their own that no one has lived in before.

Written by JESSICA ELGIN, ERA realtor.

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2 Comments

  • cv_t-bird April 28, 2018 at 2:04 pm

    After going through this exact process, some things i’ve noticed:

    – With an existing home, you know exactly what you are going to get and have a good chance of negotiating in extras. With a new home, there are many things that you may think are included but are not and you will end up paying extra money for them in the end. Most builders have a set price they require for a home and have little room to negotiate. When buying our home we negotiated in multiple things that were not included in a new home and saved us thousands of dollars.

    – Landscaping is a huge extra expense that most people do not fully consider when building a new home. That fancy block wall you see around most of the houses is typically NOT included in your purchase price (unless it already exists). You can expect at least $40+ a linear foot for a block wall (depending on height, existing conditions, etc). When we talked to the local “economical” builder in the area, they said no walls were included and if we wanted to split the cost of the wall we would have to take that up with our future neighbors (which is always a struggle, very few people have that kind of money after just purchasing a home). Plus, if you ask your neighbors and they decline, you will always resent having to pay for the wall that both of you get to use. The metal gates you see on the side of a home can be at least $2k or more. Landscaping an irrigation for the backyard can cost around 5-10k depending on the size of the yard and extent of landscaping.

    – Other things some builders neglect to include unless you pay a premium (especially the “economical” one) are towel racks & TP holders, cable/phone jacks in all rooms, granite countertops, decent flooring (usually vinyl flooring & cheap carpet throughout), garages large enough to fit a basic truck, ceiling fans, 2-tone paint, water softener system, central vacuum system, refrigerator, washer & dryer, etc etc etc.

    – Being in a new neighborhood is nice, but like the article mentions you will have dust for the next few years and will be surrounded by construction crews and debris. Think of nail guns and other equipment going off at 7am, screws and nails in the road, lack of mature landscaping, not knowing what your neighborhood will actually look like and having a constantly growing neighborhood.

    – On average, new construction can be 10-15% more expensive than a similar existing plan just a few years older (probably due to costs in building materials and regulation). Also, HOA’s in a new neighborhood may start of cheap but can quickly rise in cost and get more complicated as new people move in, i’ve seen it happen.

  • Mike P April 29, 2018 at 12:11 pm

    You should do what ever makes the realtor the most money. Cuz ya know, their working for you, right?

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