Buying a house is the largest expenditure (most of us) will make. It will be shelter and security for the family, whether we’re two, baby making us three, or fur baby and me. Which type of construction—new or existing—is ideal for you? Wave your worries away as we weigh four pros and four cons for each.
Buy New Real Estate
Do you dream of being the first to cross the threshold of a house that is your home? Though the holiday season is upon us, sugar plums are not dancing in your head. Perhaps blueprints and paint swatches are appearing instead.
You may be a fan of floor plans that are sleek and new. Yet, is new construction ideal for you? Discover the answer as we unpack four pros and four cons (see what we did there?) of buying new.
Buying a Home That’s Brand New: Four Pros
Four pros of buying new can be summarized by the four Cs:
- Customized
- Computerized
- Conscious (of the Earth)
- Committed
Customized
Custom homes are an attractive option if you’re buying new construction. You may take delight in the decision to dictate details such as carpet color (pearl, putty, or puka shell) and kitchen surface selection (granite, ceramic, or quartz). Control closet configuration and sound system installation. It’s your dime that pays for your design.
With custom homes, as the de facto first owner, you’ll avoid competition with other potential buyers. Once you and the builder come to an agreement on terms, you run the show.
Computerized
Computers play a significant role within newly built structures. “Smart homes” are powered by Wi-Fi, Bluetooth, or similar types of technologies to allow remote access to utilities and appliances. Imagine adjusting the temperature in your home… from your phone and at the very moment your flight touches down at the airport!
Computerization may mean Big Brother to you, in which case, it becomes a Big Bother. Do not fear; the top technologies in new construction can be tailored to your taste. For example, the tech behind touchless appliances is state-of-the-art but does not mean “smart” (“smart,” as in, connected to the internet).
Conscious (of the Earth)
Conscious consumption of natural resources (e.g., electricity and gas) is front-page news and at the forefront of many government policies. New construction recognizes the importance of Earth-friendliness. Today’s homes are fitted with energy-efficient appliances; bathroom fixtures are designed to consider water conservation with every flush and turn of the tap.
Consciousness extends to considering the health of the inhabitants (as well as the Earth). Many new homes eschew paints that contain volatile organic compounds (VOCs).
Without sounding too much like Bill Nye, VOCs contain chemicals such as formaldehyde and benzene. Certain studies have deemed VOCs to be unstable and as a result, they release gasses into the air. The gasses may cause respiratory irritation and headaches.
Committed
Committed to protecting the homeowner, warranties are available for new construction. A builder warranty guarantees the fitness of the components that are meant to be permanent, such as electrical systems, plumbing, and cement flooring.
Note that there are key differences between warranties for new and existing structures. A savvy homebuyer should read the warranties thoroughly. If legalese means anything but ease, engage an attorney or real estate agent to help you to delve into the details.
A Summary of the Pros of Buying New
Custom, computerized, conscious, and committed are four Cs you may be glad to see as the owner of a newly built home. However, upsides are usually accompanied by downsides and home buying is no exception. Keep reading to maintain a balanced view.
Buying a Home That’s Brand New: Four Cons
Four cons of buying new can be summarized with four (different) Cs:
- Cost
- Carte Blanche
- Calendar
- Control
Cost
Costs for new construction—custom or not—can be cataclysmic. According to the real estate website Zillow, the delta was approximately $60,000. As of April 2022, existing homes were priced at approximately $391,000 and newly built homes had a price tag of $405,000.
Carte Blanche
Carte blanche enacted in landscape design is great; may we draw your mind’s eye to the dinosaur bush in Edward Scissorhands! Bear in mind, the vegetation may take time before it grows to meet your vision. In the meantime, your greenery may be more scrubland than shrubland.
Calendar
Calendars can keep track of the time remaining until a buyer’s home is completed. Three activities that hinge on construction completion are the turning on of utilities, appliance installation, and furniture delivery. When the targeted finish date moves, these other activities stop, resulting in potential fees for rescheduling.
Control
Control, via a homeowner’s association (HOA), can safeguard neighborhoods from risks that are serious (improperly enclosed swimming pools) and those that are silly (ensuring a solitary plastic flamingo doesn’t become a flock of flamingos). However, the rules established by homeowners’ associations will vary widely.
HOAs can determine on-street parking availability, appropriate grass height, and the timeliness of snow removal. Less frequently, HOAs extend their weight of opinion to minutiae, such as the number of potted plants posed on your porch or the hue of holiday lights bedecking your bushes.
A Summary of the Cons of Buying New
Costs, carte blanche, calendars, and control are four less-attractive Cs. That said, a sound decision weighs the pros and cons of new and existing construction. It’s time to take a peek at the pluses and minuses if it’s an existing home you seek.
Buy Pre-Existing Real Estate
Do creaky banisters and pastel bathroom tiles make you smile? Your dream home may have existed for a while.
Okay, so slanted wooden floors, period charm, and aged stained-glass windows make your heart sing? An existing home may be just your thing.
For buyers keen to make a home that comes with its own history, what type of house to purchase is no mystery. Note there are pros and cons to buying an existing home. We’ll dig into the very foundation of buying an existing home (see what we did there… again?)
Finding the Right Home That’s New (To You): Four Pros
The four pros to buying an existing home are described by the four Es.
- Economical
- Established
- Easy
- Exclusive
Economical
Economics is an important consideration in today’s world. There is the global pandemic that continues to evolve, there is the instability of the job market. As such, some buyers are choosing existing construction as it is more affordable than buying new.
To make home-buying more economical, by pursuing an existing structure, you can time your purchase with market trends and seasonality. If 2023 rings in a hot buyers’ market (more houses for sale than there are buyers), you can move quickly. As the changing leaves usher in the fall of 2023 and a typically slower real estate market, you have the option to hold out.
Established
“Established” is a positive attribute that describes a neighborhood. An established neighborhood is one that is embedded into a dynamic community. The neighbors’ shop, learn, dine, and spend time in the community.
Does it sound like we’re talking about the 1998 American film, Pleasantville? We’re not. We’re making the link between thriving communities and established neighborhoods.
Think of it this way. Neighborhoods are composed of families, their pets, and their routines. Communities are made up of schools, libraries, recycling centers, houses of worship, parks, and markets. When the neighbors interact and engage with these components, it allows the community to thrive, further bonding them.
Easy
Purchasing an existing home can be much easier than purchasing a new one. Decision-making and moving are simpler processes. Often, existing homes are closer to developed or commercial areas.
In an existing home, there are fewer decisions to be made. After all, the structure is set, and the design is done. The hardware is hammered, and the paintings are hung. There is no need to niggle over natural neutrals nor wonder about accent walls.
Another aspect of ease is that moving into an existing home is a breeze. Yards surrounding existing homes are plush swathes of green grass and pathways have been paved. Traversing these surfaces while carrying furniture and boxes is a walk in the park.
With new construction, both the landscapes and hardscapes may be unfinished. Absent grass and a lack of walkways mean you will be mucking through the mud, making for moving mayhem.
With the inception of shops, restaurants, and public transportation routes, people take notice. Many want to live near these conveniences. As such, you will find existing homes hovering nearby. Want to walk to the grocery store to get fresh ingredients for tonight’s salad? Yes, please!
Exclusive
Existing homes often are exclusive. We aren’t talking about buying a property within a posh postal code. We mean that existing homes have unique attributes that make them one-of-a-kind, or exclusive.
The floors may slope slightly in a house that is a hundred years old. However, the warm patina of those age-worn wooden planks can’t be replicated. Egg-and-dart molding makes dusting a chore, but nothing tops off wainscoting so winningly.
The Pros of Procuring an Existing Home
Economical, established, easy, and exclusive are the attractive attributes of an existing house. Let’s give thought to some of the drawbacks associated with the purchase of existing real estate.
Finding the Right Home That’s New (To You): Four Cons
Four cons of buying an existing home are denoted below by the four Bs.
- Behind
- Before technology
- Bills
- Buyer beware
Behind
Many buyers see period-specific characteristics in a home and think, now that is old-fashioned charm! Other buyers see the same and think, wow, that’s just… old.
Houses that have been in existence for decades have floor plans that tend to be boxier or divided. Each room was discrete and had four prominent walls.
Older homes can have dated decor. Think of floral wallpaper, Formica countertops, and gold-tone bathroom hardware. Remember those decorative borders that ran the perimeter of a room, just below the ceiling, who wouldn’t want a family of ducks on a constant parade?
Yes, decor can be removed or updated. These projects, while gratifying, often take more time than you’d think. Coats of paint need to dry. Keen specificity (e.g., drill bit size) is required for many of the tools required, which translates to multiple trips to home improvement stores.
Sizeable improvements—like applying subway tiles to the kitchen backsplash—can be expensive. Costs involved with so-called simple refreshes, like swapping out kitchen hardware, add up quickly. A knob or pull may be a mere $1.50, but each cabinet door and drawer will require one.
Before Technology
Homes that were built 20 or more years ago lacked “smart” features due to the simple fact that the technology wasn’t available at the time. If you want to use web-based technology to operate appliances that come with older construction, it means replacing entire systems and units. You can’t retrofit a 12-year-old dishwasher so it can join the Internet of Things (IoT).
Besides missing out on the convenience and coolness of “smart” features, the systems and appliances found inside older homes were not manufactured with the environment in mind. Washers, dryers, and dishwashers use greater quantities of natural resources (e.g., electricity and water).
Bills
Existing homes may require a higher level of maintenance, which has a direct correlation to cost. Consider major appliances such as the furnace and the water heater. If they are years old, tracking down replacement parts can be an arduous task. Then, you’ll need to find someone with the know-how to install them.
If the home you’re considering is a few decades old, some of the home’s components (e.g., windows) won’t be up to the standard of those found in newly built construction. Windows in modern homes are multilayer. Some are treated with gas fills between the panes to keep the internal temperature steady. Older windows can’t compete when it comes to insulation.
Replacement parts and the service professionals’ hourly rates can be a significant expense. Components found in existing construction are less energy efficient, so heating and cooling bills will be higher.
Buyer Beware
While “caveat emptor” sounds like a quip straight out of a TV legal drama, it is a serious consideration for anyone who is purchasing an existing home. “Let the buyer beware,” is the meaning of the Latin phrase.
To that end, in the US there are laws on the books that require property sellers to provide disclosures to property buyers. Laws like these protect potential buyers. However, exceptions exist, and they are unique to the state, commonwealth, or locality. Keen attention to applicable laws in your area is required.
One exception is exemplified in the state of New York. A seller can pay $500 to the buyer at closing, in lieu of providing a list of specific problems that are disclosable by New York law. “I receive $500 back at closing!” sounds great, but an undisclosed problem could cost significantly more than $500.
Once you’ve found your perfect home (100 years “young,” cobblestone driveway, mullioned windows, and a gas lamp for a porch light), be sure to familiarize yourself with potential drawbacks. Many are addressed in real estate agreements. We’re listing some common ones below:
- Known or potential contamination (e.g., radon, asbestos)
- Existence of a governing HOA
- Water damage
- Repair history for structural features (e.g., roof, foundation)
If you’re working with a real estate professional or attorney, they’ll be helping you to beware, too. However, their services also are not free.
A Summary of the Cons of Purchasing an Existing Home
Dated designs, lack of technology enablement, maintenance and repair expenses, and undisclosed problems are the downsides to purchasing an existing home. There are workarounds and substitutions, and you can always choose to “do without,” but it is wise to be familiar with the downsides before signing on the dotted line.
Conclusion
Perhaps “forewarned is forearmed” is a phrase you’ve heard from a family member or a coach. The phrase is very relevant to making real estate decisions.
Whether you’re choosing a brand-new farmhouse-style custom home (every appliance can be controlled by an app on your phone) or a gently aging Cape Cod with its original roof intact, each has its pluses and minuses.
The wisest approach is to be free of a mindset. If you think, new homes are better because everything is modernized, purposefully take a look into a few existing homes to see the potential positive aspects, such as the durability of hardwired security systems.
If you think, existing homes are multidimensional and truly unique so why would you want a cookie-cutter McMansion, viewing a model home may change your outlook. Nine shades of neutrals and shiplap may not be your thing, but insulation options including cellulose and mineral wool make your Green New Deal heart sing.
****If you are interested in keeping up with my blogs. Please join my free newsletter or my Facebook group, Home Buying & Selling Resource Community. If you are on the fence about buying a house, pick up a copy of my book Essential Advice for Buying Your First Home and Navigating Through the Mortgage Loan Process. It’s available on Amazon in print, kindle, or audiobook format.
0 Comments