Buying a New vs Pre-owned Home
Here are 10 main Differences
One of the biggest purchases the average human will make in their lifetime is their home. It’s a pretty big deal! So it’s important to know the basics, starting with whether to build something brand spanking new or putting that deposit down on a bit of a fixer-upper. Here are my differences to consider when buying a new construction home versus a resale home.
First off, it’s good to realize that there is no "one size fits all" option when buying a home. Your choice could be solely on the fact that you like the character and charm in something older, you love the creaky old floors of that cozy country home, or maybe new and trendy has just always drawn you in. For both cases, it’s a good idea to know what you might be dealing with in various circumstances and stages of purchasing and owning your home.
Why don’t more people buy new homes? Or better yet, why don’t more people even consider buying a new home in the beginning? I know when I first set out to become a homeowner, I didn’t even think about new construction as an option. It’s always been thought of as too expensive, hard to find and taking too long to get. So, end of story…no new home for me. But here’s what I did not know:
The price is one of the first things we have to look at when we see the perfect-looking home pop up. The price of a property is one of the biggest influences on our decision of whether to pursue any further thought or interest in a purchase. Prices are especially tricky in resale, as they are always ultimately up to the owner/seller to decide and that can make them sometimes too high or too low. That’s why a third-party professional's help in this department is highly recommended
(trust me, it can be a stressful thing to do alone).
New homes, however, have fixed prices. What does that mean? No bidding wars, no stressful competition and a clearly laid out deposit structure. That makes it very different from a resale, especially in today’s market where most buyers have put in their fair share of offers, only to be outbid by far more than their budget. The deposit amount put down for a new home is typically 15-20% of the purchase price, versus a resale where you typically need a minimum of 5% and can do more. The deposit structure of a new build can be flexible depending on the builder, whereas with resale, you are required to make that deposit right at the beginning.
Life Expectancy of the home
The life expectancy of a home is all over the place. With buying a home whether new or used, you are taking a risk. That’s something to be aware of right from the start. But there is also a risk in all investments. ;) When purchasing a resale home, you can and should get a home inspection. However, this is no guarantee that everything is and will continue to run all fine and dandy. Everything in a home has a lifespan and eventually needs to be replaced, maintained or renovated. So if you can reduce that risk to the best of your ability, you are certainly winning. With a new construction home, you get everything NEW. We are talking about new Plumbing, Electrical, HVAC, Appliances, HVAC, Septic systems, Well and more. What peace of mind you can have, knowing that the risks in your new construction home are low, and that most issues that do arrive will be covered by Tarion or the builder, depending on what it is and why it has happened.
In connection with our life expectancy, we have the unexpected. This is found more strongly in a resale home. Picture this, you found a charming old bungalow and you have big plans to renovate it into the ideal space for your family. The inspection went well and there was nothing to be concerned about. This is, at least not until you decided to open up the walls in the kitchen to change the layout. That’s when you find black mold or maybe, an animal infestation just in the walls. And this leads to ripping out more and finding more that needs to be fixed. It’s an unexpected situation that happens a lot. Now your charming old bungalow is causing some major costs just to make it liveable. There are so many examples that can be used in this category, especially when a property isn’t maintained properly. The list of unexpected items decreases significantly with a new home. It will also be much easier on your health to not have mold, asbestos, lead paint and more surprises of resale homes. Besides the purchase of a new home, the best way to avoid surprises is to also have a professional you can trust that will do their due diligence. Placez Realty
is at your service and can be reached anytime for these important tasks.
The option to customize a home is available with a new build and a resale home. In resale, you will need to work with the space you purchase, hoping that you don’t run into the unexpected. It can go great, and you can end up with a gorgeous home. But one thing with renovations that you cannot always do, is changing the bones. You cannot move structurally supporting walls around to create an open concept in a home that is not open. So if you are looking to have the layout flow exactly as you picture, then a new construction home is a lot easier. You most often can pick out the exact model you want, and then select the packages, fixtures and designs that suit you. Your customization options will vary greatly depending on your builder and the type of development you are looking at. But getting to be a part of the selections is so rewarding. You get to walk into a space that’s been built for YOU and your loved ones. So you will love it!
Insurance is required by almost all homeowners to get basic financing to mortgage a home. It’s not a luxury, it’s a necessity and it is generally cheaper on a newly built home. It has to pass several inspections throughout the building process, and a final one for occupancy before you move in. So it has to have things like smoke and carbon monoxide detectors, proper windows, doors and more. It’s by the books and no one is trying to hide anything from you. (Or at least they better not!) With everything up to date and safe, it's what your typical insurance broker wants to see. Resale homes are a little more complicated. For example, if your home is older and your electricity still has knob and tube wiring, you most likely will have to update it before coverage is permitted. Insurance companies don’t want to take big risks.
Energy Efficiency! Okay, I know what you are thinking….why do I need to worry about energy in my home? Does it really make that big of a deal? Yes, yes it does. It’s part of your investment, and it will show over time how much you can save by having those vinyl windows, quality seals, special insulation throughout the home and higher performing systems. It increases resale value, saves you money and makes your home more comfortable. Check out Energy Star if you need more convincing.
Energy Star is only improving, so the newer the home and technology, the better your chances are of saving energy costs if your builder is on board for Energy Star homes.
Okay, so this is something that many of us don’t even think about until we are moving in. When you purchase a resale home, the previous owner will usually do their best to tidy up and should be clearing garbage and anything they don’t want you to be keeping. But everyone has a different standard of cleanliness, and unfortunately, with all the business of moving, you as the new owner will most likely get left with a dirty home. That seller isn’t getting anything extra to shine your windows and mop your floors spotless. So do they? I think you get the point. It’s hit and miss, but I know I was certainly doing a lot of cleaning on my first home.
A new home on the other hand has a completely different kind of dirtiness about it. The house itself will be thoroughly cleaned for you to move into. But no matter how good of a job the cleaners do, they cannot remove the construction dust that will start to settle after the move and even a few weeks into living there. This is especially true for new homes with a brand new HVAC system. Those registers have been filled with dust for months and now it’s all coming out and it will settle on your trim, your floors, your cupboards etc. So just be ready for it, and know that if you have a bit of a sore throat the first week, it's probably just the dust in the air.
Landscape & Hardscape
Who doesn’t love a fresh-cut lawn with lines of perfection and full mature gardens to ramp up that curb appeal?! If you are looking at a resale, it’s most likely had the time to grow and mature, so you are more likely to have a nice deck or patio, grass, larger trees, and maybe even a garden. Maybe you even score a pool, a patio, a deck or a fancy hot tub. Sadly, you won’t find any of these things on your new home lot (at least in the country). You will most likely need to look into the landscaping yourself after moving in, and until then, there might be just dirt everywhere. But if you like a good project, you’ll see that the slate is clean and you can do whatever you want to your new back and front yard. You can design it to fit exactly what you need (or want ;) Let your imagination run wild!!
Open House/ Showings
I think one of the trickiest parts of buying a new home is not being able to experience it before you buy. You usually get a floor plan, renderings and as much detail as a builder can provide, but getting to physically touch and experience a space makes it a lot easier to picture your own family living there. Sometimes there are model homes to walk through, but it’s not the same as Resale where you can see and walk through the exact house you want to buy. Open houses and showings are one of the best ways to know for sure that you are ready to put that deposit down.
Closing & Possession Date
Last but certainly not the least is our possession date! The day you finally get to move into your new or used home and make it your own. The closing date for a new construction home is different from a Resale as the date you can actually get the keys and move in is mostly determined by the home’s expected completion date. Construction delays can happen due to weather or materials (or the whole crew get’s COVID!). Then the home gets a final inspection to grant occupancy. The builder will also do a walk-through and orientation with the new homeowner at least a few days before possession to be sure everything is in order. Resale on the other hand is only getting an inspection if it was in the conditions. Trying to line things up for closing in resale homes can be hard with trying to meet the buyer and sellers' schedules. But overall the process to close the house and gain possession is very similar for both.
So there you have it. 10 differences you might encounter with buying a new home versus a resale home. In the end, we all have our preferences and reasons for choosing what we do, and I hope that my thoughts can be of help to you on your home buying journey.
And hey, if you are in the market to buy, Park View Homes just won a National Award of Housing Excellence for the Best Detached home of 2,101 to 2,400 square feet this year on their Sussex Model. It’s a must see home. Check it out!
Park View Homes Website for more information.