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<\/p>\nShould I Build A New Home or Buy An Existing Home?<\/p>\n<\/div>\n
Build a new home or buy an existing home?<\/em><\/strong>\u00a0 While this isn\u2019t a top frequently asked question from potential home buyer\u2019s<\/a><\/span>, it certainly is a question that comes up from time to time in real estate. \u00a0There are pros and cons to both building a new home and the same can be said about buying an existing home.<\/p>\n This past weekend while out showing existing homes as well as touring a couple new builds\u00a0in Webster, NY with buyer\u2019s, this question was asked of me. \u00a0There is certainly no replacing\u00a0the feeling of walking into a brand, spanking new home but there also is no replacing an\u00a0existing home that is loaded with natural charm and character.<\/p>\n Whether you decide to purchase an existing home or build a brand new home, here are several pros and cons to each option. \u00a0While there is no absolute answer for every person, knowing the pros and cons to a new build and also to an existing home can help make the decision easier.<\/p>\n New Homes<\/strong><\/span><\/p>\n What do I classify as a new home? \u00a0A new home is a home\u00a0that has never been lived in before. \u00a0It doesn\u2019t necessarily have to be a home that has not begun the build phase. \u00a0In many new home developments, the model home is available for purchase and in most cases, the builder is willing to make changes to the model, prior to occupancy. \u00a0<\/em><\/p>\n Pros Of Building A New Home<\/strong><\/span><\/em><\/p>\n Full Customization<\/span><\/strong><\/span><\/p>\n If you decide to build a new home, huge pro is the ability to customize the home to your exact wants and needs. \u00a0Many existing homes, especially older homes, have more of a choppy floor plan. \u00a0This is the complete opposite of how new homes are being built nowadays. \u00a0New homes are being built with open floor plans.<\/p>\n In addition to choosing the floor plan you desire in your home, you also have the ability to select the quality of finishes. \u00a0If you\u2019re looking for a home with granite counters, high end cabinetry, and tile flooring, you can have it customized to your desire. \u00a0In a new build you control exactly how your home will look when it\u2019s completed, which is an obvious benefit to building a new home.<\/p>\n The \u201cNew Home\u201d Smell<\/span><\/strong><\/span><\/p>\n There\u2019s a pretty good chance you\u2019ve heard people say that\u00a0there is nothing like\u00a0the smell of a new car. \u00a0The same can be said about a new home. \u00a0If you decide to build a new home, a benefit is the \u201cnew home\u201d smell.<\/p>\n If you have ever been in the market for a home and looked at existing homes, you\u2019ve probably walked into a home that had a foul odor. \u00a0It\u2019s a horribly unpleasant\u00a0experience and foul odors are one of the top things that scare away buyer\u2019s from a seller\u2019s home<\/a><\/span>. \u00a0If you decide to build a new home you do not have to deal with odors such as smoke, pets, garbage, or any other unpleasant odors, which is clearly desirable.<\/p>\n More Efficient Home<\/span><\/strong><\/span><\/p>\n Another benefit to building a new home is that the home is going to be more efficient than an existing home. \u00a0There is no question that a newly built home is more efficient than a home that was built in 1950. \u00a0There are many areas in a new home that will be significantly more efficient than an existing home.<\/p>\n One of biggest components in a new home that will be more efficient than an existing home is the level of insulation. \u00a0The recommended level of insulation<\/a><\/span> in 2015 are much different than they were in 1950. \u00a0Generally, the more insulation that a home has, the lower the heating and cooling bills will be.<\/p>\n Other potential\u00a0components of a new built home that will be more efficient than an older home include:<\/em><\/p>\n Fewer\u00a0Potential Health Hazards<\/span><\/strong><\/p>\n Newly built homes have considerably fewer potential health hazards than an existing home, which is a benefit to building a new home. \u00a0Some of the health hazards you may find in an existing home can actually be pretty scare hazards and ones that can terrify potential buyer\u2019s.<\/p>\n One of the biggest potential health hazards that you will find in existing homes that you will not find in a new home is the presence of lead based paint. \u00a0Homes built prior to 1978 in all likelihood have some presence of lead paint. \u00a0Lead paint can be hazardous if ingested and can be a big concern for buyer\u2019s who have young children.<\/p>\n There are many other potential health hazards that do not exist in newly built homes, including:<\/p>\n Cons Of Building A New Home<\/strong><\/span><\/em><\/p>\n Resale Value<\/span><\/strong><\/span><\/p>\n In real estate there are many different types of \u201cvalues.\u201d \u00a0Some examples are assessed value, appraised value, and market value. \u00a0All three values are different<\/a><\/span>. \u00a0Another value and one that needs to be strongly considered when deciding whether to build a new home or buy an existing home is the resale value.<\/p>\n Generally speaking, the resale value of a newly built home is less than the cost of building the home itself. \u00a0In some situations the resale value can be significantly less. \u00a0Recently while showing\u00a0a home that was built in 2007 in Pittsford, NY, a bedroom community of Rochester, NY<\/a><\/span>, I was told\u00a0by the seller\u2019s Realtor that the seller had over $450,000 into the home they had built a short 8 years ago. \u00a0The home was listed at $379,900. \u00a0It\u2019s important to understand when building a new home, it\u2019s extremely unlikely you will recoup the entire cost of building the home when it becomes time to sell.<\/p>\n Upfront Costs Are Higher On A New Build!<\/p>\n<\/div>\n Higher Upfront Costs<\/span><\/strong><\/span><\/p>\n Building a new home often will result in a much larger upfront cost from a buyer. \u00a0If you decide to build a new home there are several things you need to know, and money is certainly one that comes to mind immediately.<\/p>\n The first upfront cost that you will normally be required to pay will be a deposit to hold the desired location of your new build. \u00a0The deposit will depend on the price of the home you\u2019re having built, however, expect at least a minimum of 2-3% of the cost of the home. \u00a0Before a builder will begin to build your home, they\u2019re likely to require you put an additional 10% of the price of the home, prior to them starting their excavation and digging.<\/p>\n The upfront costs that are involved when building a new home are considerably higher than buying an existing home, which is clearly a potential drawback. \u00a0Make sure before you decide to move forward on building your dream home, you discuss with the builder\u00a0all of the upfront costs involved.<\/p>\n Build Time<\/span><\/strong><\/span><\/p>\n Anticipation often can drive home buyer\u2019s crazy, whether it\u2019s new build or existing homes. \u00a0Waiting for the closing to occur on a home can often be a very anxious time period for a buyer. \u00a0One con of building a new home is the time it can take for the home to be built.<\/p>\n The build time will vary from builder to builder. \u00a0Generally speaking, a new home will take 120-150 days to be built. \u00a0This general time period can be effected however by many things that are out of the control of the builder, the buyer, and everyone else. \u00a0Depending on the location of the new construction, weather can often add time to the number of days it takes for a new home to be built.<\/p>\n In addition to the actual time it takes to build a new home, you must also consider the additional time it may take to obtain any required certificates of compliance from your local municipality. \u00a0The\u00a0process of obtaining these certificates could potentially add on more time in addition to the actual time it takes to build the new home.<\/p>\n Unexpected Costs<\/span><\/strong><\/span><\/p>\n If you decide to build a new home, make sure you understand there maybe some unexpected costs that can arise at anytime, which is an obvious drawback to building a new home versus buying an existing home. \u00a0Nobody likes surprises, period, but when it comes to new construction, they can occur.<\/p>\n A prime example of an unexpected cost during the construction of a new home is additional excavation costs. \u00a0Unfortunately there is no crystal ball that can predict what exactly will occur once ground is broken. \u00a0While it would be nice, a contractor is not going to work for free. \u00a0If the excavation is taking longer than anticipated and is costing more labor hours, the costs in all likelihood will be passed on to the buyer.<\/p>\n Future Construction<\/span><\/strong><\/p>\n Depending on what stage a new development is in, it\u2019s very possible there could be future construction after you have moved into your new home. \u00a0With future construction comes future noise and possible annoyances.<\/p>\n Future construction is something you should consider before deciding to build a new home as it can be an obvious distraction and drawback. \u00a0If you are building a new home, make sure you know exactly what the future plans are for the development so that you can assess whether you\u2019re comfortable with the plans.<\/p>\n Existing Homes<\/strong><\/span><\/p>\n What do I classify as an existing home? \u00a0An existing home is one that has been lived in before. \u00a0An existing home could be only 2-3 years young, but nonetheless, it has been lived in before. \u00a0\u00a0<\/em><\/p>\n Pros Of Buying An Existing Home<\/strong><\/span><\/em><\/p>\n Quicker Closings & Possession<\/span><\/strong><\/p>\n When buying an existing home, generally it takes 45-60 days once a purchase offer is accepted<\/a><\/span>. \u00a0This is considerably less than the average build time of a new home, which ranges between 120-150 days. \u00a0If time isn\u2019t on your side, a big plus to purchasing an existing home is the quicker closing and possession.<\/p>\n While it\u2019s fairly uncommon practice, the possibility exists you may also be able to get possession of a property prior to closing. \u00a0Pre-possession is usually frowned upon by attorney\u2019s due to liability issues and in the unfortunate case a buyer gets disapproved for their mortgage. \u00a0Even though the chance of pre-possession is minimal, since an existing home is already built, the possibility of moving in before closing still does exist which is a plus to buying an existing home.<\/p>\n Get More For Your Money When Buying An Existing Home<\/p>\n<\/div>\n Better Value<\/span><\/strong><\/span><\/p>\n In most real estate markets, you will be able to get more for your money when buying an existing home versus new construction. \u00a0One benefit to buying an existing home is that you can get a larger home, an updated home, and a home in an area you really want to live in.<\/p>\n For example, if you are looking to spend no more than $200,000 on a home, while you certainly can build for $200,000, you may not get the upgrades, space, and location desired. \u00a0A newly built $200,000 home may only have 2,000 square feet and basic amenities while an existing home may have the 2,500 square feet you desire along with upgrades such as granite counters and a finished basement. \u00a0In most cases, buying an existing home is a better value than buying new construction.<\/p>\n Established Neighborhoods<\/span><\/strong><\/span><\/p>\n Another perk to buying an existing home is the neighborhoods will be more established. \u00a0There are many considerations that should be made regarding neighborhoods<\/a><\/span> when buying a home. \u00a0The quality of the local schools, cell phone reception, internet connections, and noise levels are just a few noteworthy considerations.<\/p>\n When buying an existing home, many of the considerations that should be taken into account are easy to assess in an established neighborhood whereas a new home development maybe more difficult to assess. \u00a0If you\u2019re looking for a tree-lined, mature, and quiet neighborhood street, purchasing an existing home maybe the best option.<\/p>\n Classic Charm & Characteristics<\/span><\/strong><\/span><\/p>\n While classic charm and characteristics can be added to a new home, it comes with a price tag. \u00a0There is something to be said about an existing homes natural gum wood trims, hardwood flooring, leaded glass, and other classic characteristics that are not found in new homes.<\/p>\n Finding classic charm and characteristics can actually be done fairly easily when buying an existing home. \u00a0If you\u2019re looking for classic characteristics, a huge benefit to purchasing an existing home is that you should be able to find them at an affordable price.<\/p>\n Cons Of Buying\u00a0An Existing\u00a0Home<\/strong><\/span><\/em><\/p>\n Not Getting Exactly What You Want<\/strong><\/span><\/p>\n One negative to buying an existing home is the fact you will likely not find a home that has absolutely everything you\u2019re looking for. \u00a0When buying an existing home, you must be ready to make sacrifices. \u00a0Whether it\u2019s the location\u00a0of a dining room or the size of a closet in a bedroom, a negative to buying an existing home is you cannot determine all the details of the home.<\/p>\n If you decide to purchase an existing home, it\u2019s recommended you determine what your wants and needs are in a potential home, before you begin looking. \u00a0If you need to have a finished basement and\u00a0a 2-car garage, make sure you are prepared to\u00a0give up other things that maybe something you wanted in a potential home.<\/p>\n Upgrade & Renovation\u00a0Expenses<\/span><\/strong><\/span><\/p>\n If you decide to buy an existing home, knowing that you will have to make changes is important. \u00a0With the desired changes you want to make comes a cost. \u00a0Having additional costs to upgrade or renovate an existing home can be a drawback to buying an \u201colder\u201d home. \u00a0After buying a home, many home buyer\u2019s don\u2019t have tons of money remaining and may not have the money available to make upgrades and renovations.<\/p>\n Final Thoughts<\/span><\/strong><\/span><\/p>\n The above pros and cons to both buying a new home or an existing home should be able to help you decide which is the best option, if you happen to be on the fence. \u00a0Whether you decide to build a new home or buy an existing home, it\u2019s a very exciting time.<\/p>\n It\u2019s almost a guarantee you will have many questions throughout the process, so it\u2019s extremely important you have great representation when buying a home, even if you decide to build a new home. \u00a0Make sure when buying an existing home or building a new home, you know how to properly interview a buyer\u2019s agent<\/a><\/span>. \u00a0Choosing a top Realtor is extremely important. \u00a0A top Realtor will be able to guide you through the new construction process or the process of purchasing an existing home.<\/p>\n\n
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