In today's highly competitive market there is a vast array of
choices to be made when deciding on the type of dwelling you wish to
reside in. This article will focus on the advantages and disadvantages
of buying a new home versus a resale home.
Advantages of a New Home:
One of the primary advantages of buying a new home is the ability
to decorate your home from the beginning exactly the way you want. You
can pick all the colors, which range from paint to flooring. You can
also make the tile and cabinetry selection for the kitchen and
bathrooms.
Often times, new homes will have more modern conveniences, better insulation and can be more energy efficient.
Disadvantages of a New Home:
Unfortunately, with a new home purchase you should be prepared for
the on-going construction you will find around you. Chances are that
your lawn will not be in, your driveway will be gravel and your street
will turn into a sea of mud whenever it rains or snows. If things are
going to go wrong with a newly constructed house, they will appear in
the first one to two years. As the house settles you may find cracks
appearing in the walls of the basement.
There are additional expenses associated with new homes that you
will not typically find in a resale home. For example, you may have to
spend money for appliances, curtains, drapes, landscaping, air
conditioning, etc.
Closing costs are typically higher for new homes. The purchaser
will pay for such additional costs as the New Home Warranty Program,
tree planting, utility hook ups and paving of the driveway.
Usually, when you buy a new home, you don't have an opportunity to
see the actual layout. All that is provided is a blueprint and in many
cases the end product may be a disappointment to the purchaser.
Additionally, there is the uncertainty as to who will be your
neighbors.
Advantages of a Resale Home:
The major advantage of buying a resale home is that you are moving
into an established neighborhood. Your lawn is green, your shrubs are
growing, your driveway is paved and your trees are well enough
established to give your street a feeling of permanence.
In terms of investment, a resale home will often give you more for
your value than a brand new home. Many owners put thousands of dollars
into home improvements ranging from small items, such as landscaping,
to major projects, such as a finished basement. Although these
improvements will make the home more attractive to potential buyers,
they may not increase the market value of the home. A $30,000 swimming pool or a $20,000
finished basement or even $5,000 worth of shrubs may make the home
very attractive. However these additional costs incurred may not
necessarily increase the market value of a home. The buyer gets the
home at its real market value, which is based on comparable homes for
sale or sold in the neighborhood. All those expensive extras may come
to the buyer at at a lower cost.
With a resale, the
vendor's asking price is almost always negotiable downwards unlike the
builders list price which is usually firm. Any extras or changes are
added to the list price of a new home.
Also keep in
mind resale homes less than 10 years are still fairly new so you get
the advantages of having a newer home at a lower resale price.
Disadvantages of an Older Resale Home:
When looking at the disadvantages of buying an older resale home you need to consider the following:
- Is the home in move-in condition?
- Is the heating, cooling, roof, electrical, windows, plumbing systems, kitchen and bathrooms updated?
- Does the purchase price reflect the condition of the home?
- Once
you have considered the above items you would be well on you way on
making a decision to buy or not to buy an older resale home.
Summary:
Both
new and resale homes have their advantages and disadvantages, you would
need to evaluate each option and make an educated decision based on
your particular needs.