rochesterrealestateblog.com http://www.rochesterrealestateblog.com/should-i-build-a-new-home-or-buy-an-existing-home/

Should I Build A New Home Or Buy An Existing Home?

Should I Build A New Home or Buy AnExisting Home?

Build a new home or buy an existinghome? While this isn’t a top frequentlyasked question from potential homebuyer’s, it certainly is a question thatcomes up from time to time in real estate. There are pros and cons to both buildinga new home and the same can be saidabout buying an existing home.

This past weekend while out showingexisting homes as well as touring acouple new builds in Webster, NY withbuyer’s, this question was asked of me. There is certainly no replacing thefeeling of walking into a brand, spankingnew home but there also is no replacingan existing home that is loaded withnatural charm and character.

Whether you decide to purchase anexisting home or build a brand newhome, here are several pros and cons toeach option. While there is no absoluteanswer for every person, knowing thepros and cons to a new build and also toan existing home can help make thedecision easier.

New Homes

What do I classify as a new home? Anew home is a home that has never beenlived in before. It doesn’t necessarilyhave to be a home that has not begun thebuild phase. In many new homedevelopments, the model home isavailable for purchase and in most cases, the builder is willing to make changes to the model, prior to occupancy.

Pros Of Building A New Home

Full Customization

If you decide to build a new home, huge pro is the ability to customize the home to your exact wants and needs. Many existing homes, especially older homes, have more of a choppy floor plan. This is the complete opposite of

how new homes are being built nowadays. New homes are being built with open floor plans.

In addition to choosing the floor plan you desire in your home, you also have the ability to select the quality of finishes. If you’re looking for a home with granite counters, high end cabinetry, and tile flooring, you can have it customized toyour desire. In a new build you control exactly how your home will look when it’s completed, which is an obviousbenefit to building a new home.

The “New Home” Smell

There’s a pretty good chance you’ve heard people say that there is nothing like the smell of a new car. The same canbe said about a new home. If you decide to build a new home, a benefit is the “new home” smell.

If you have ever been in the market for a home and looked at existing homes, you’ve probably walked into a homethat had a foul odor. It’s a horribly unpleasant experience and foul odors are one of the top things that scare awaybuyer’s from a seller’s home. If 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.

More Efficient Home

Another benefit to building a new home is that the home is going to be more efficient than an existing home. There isno question that a newly built home is more efficient than a home that was built in 1950. There are many areas in anew home that will be significantly more efficient than an existing home.

One of biggest components in a new home that will be more efficient than an existing home is the level of insulation. The recommended level of insulation in 2015 are much different than they were in 1950. Generally, the moreinsulation that a home has, the lower the heating and cooling bills will be.

Other potential components of a new built home that will be more efficient than an older home include:

Heating System

Air Conditioning

Windows

Rain Collection Systems

Solar Paneling

Appliances

Fewer Potential Health Hazards

Newly built homes have considerably fewer potential health hazards than an existing home, which is a benefit tobuilding a new home. Some of the health hazards you may find in an existing home can actually be pretty scarehazards and ones that can terrify potential buyer’s.

One of the biggest potential health hazards that you will find in existing homes that you will not find in a new home isthe presence of lead based paint. Homes built prior to 1978 in all likelihood have some presence of lead paint. Leadpaint can be hazardous if ingested and can be a big concern for buyer’s who have young children.

There are many other potential health hazards that do not exist in newly built homes, including:

Asbestos

Radon

Moisture

Mold

Cons Of Building A New Home

Resale Value

In real estate there are many different types of “values.” Some examples are assessed value, appraised value, andmarket value. All three values are different. Another value and one that needs to be strongly considered whendeciding whether to build a new home or buy an existing home is the resale value.

Generally speaking, the resale value of a newly built home is less than the cost of building the home itself. In somesituations the resale value can be significantly less. Recently while showing a home that was built in 2007 in Pittsford,NY, a bedroom community of Rochester, NY, I was told by the seller’s Realtor that the seller had over $450,000 intothe home they had built a short 8 years ago. The home was listed at $379,900. It’s important to understand whenbuilding a new home, it’s extremely unlikely you will recoup the entire cost of building the home when it becomes timeto sell.

Upfront Costs Are Higher On A New Build!

Higher Upfront Costs

Building a new home often will result in a much larger upfront cost from a buyer. If you decide to build a new homethere are several things you need to know, and money is certainly one that comes to mind immediately.

The first upfront cost that you will normally be required to pay will be a deposit to hold the desired location of your newbuild. The deposit will depend on the price of the home you’re having built, however, expect at least a minimum of 2-3% of the cost of the home. Before a builder will begin to build your home, they’re likely to require you put anadditional 10% of the price of the home, prior to them starting their excavation and digging.

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. Make sure before you decide to move forward on building your dream home,you discuss with the builder all of the upfront costs involved.

Build Time

Anticipation often can drive home buyer’s crazy, whether it’s new build or existing homes. Waiting for the closing tooccur on a home can often be a very anxious time period for a buyer. One con of building a new home is the time itcan take for the home to be built.

The build time will vary from builder to builder. Generally speaking, a new home will take 120-150 days to be built. This general time period can be effected however by many things that are out of the control of the builder, the buyer,and everyone else. Depending on the location of the new construction, weather can often add time to the number ofdays it takes for a new home to be built.

In addition to the actual time it takes to build a new home, you must also consider the additional time it may take toobtain any required certificates of compliance from your local municipality. The process of obtaining these certificatescould potentially add on more time in addition to the actual time it takes to build the new home.

Unexpected Costs

If you decide to build a new home, make sure you understand there maybe some unexpected costs that can arise atanytime, which is an obvious drawback to building a new home versus buying an existing home. Nobody likessurprises, period, but when it comes to new construction, they can occur.

A prime example of an unexpected cost during the construction of a new home is additional excavation costs.

Unfortunately there is no crystal ball thatcan predict what exactly will occur onceground is broken. While it would be nice,a contractor is not going to work for free. If the excavation is taking longer thananticipated and is costing more laborhours, the costs in all likelihood will bepassed on to the buyer.

Future Construction

Depending on what stage a newdevelopment is in, it’s very possible therecould be future construction after youhave moved into your new home. Withfuture construction comes future noiseand possible annoyances.

Future construction is something youshould consider before deciding to build anew home as it can be an obviousdistraction and drawback. If you arebuilding a new home, make sure youknow exactly what the future plans are forthe development so that you can assesswhether you’re comfortable with theplans.

Existing Homes

What do I classify as an existing home? An existing home is one that has beenlived in before. An existing home couldbe only 2-3 years young, butnonetheless, it has been lived in before.

Pros Of Buying An Existing Home

Quicker Closings & Possession

When buying an existing home, generally it takes 45-60 days once a purchase offer is accepted . This is considerablyless than the average build time of a new home, which ranges between 120-150 days. If time isn’t on your side, a bigplus to purchasing an existing home is the quicker closing and possession.

While it’s fairly uncommon practice, the possibility exists you may also be able to get possession of a property prior toclosing. Pre-possession is usually frowned upon by attorney’s due to liability issues and in the unfortunate case abuyer gets disapproved for their mortgage. Even though the chance of pre-possession is minimal, since an existinghome is already built, the possibility of moving in before closing still does exist which is a plus to buying an existinghome.

Get More For Your Money When Buying An Existing Home

Better Value

In most real estate markets, you will beable to get more for your money whenbuying an existing home versus newconstruction. One benefit to buying anexisting home is that you can get a largerhome, an updated home, and a home inan area you really want to live in.

For example, if you are looking to spendno more than $200,000 on a home, whileyou certainly can build for $200,000, youmay not get the upgrades, space, andlocation desired. A newly built $200,000home may only have 2,000 square feetand basic amenities while an existinghome may have the 2,500 square feetyou desire along with upgrades such asgranite counters and a finishedbasement. In most cases, buying anexisting home is a better value thanbuying new construction.

Established Neighborhoods

Another perk to buying an existing homeis the neighborhoods will be moreestablished. There are manyconsiderations that should be maderegarding neighborhoods when buying ahome. The quality of the local schools,cell phone reception, internetconnections, and noise levels are just afew noteworthy considerations.

When buying an existing home, many ofthe considerations that should be takeninto account are easy to assess in anestablished neighborhood whereas a new home development maybe more difficult to assess. If you’re looking for atree-lined, mature, and quiet neighborhood street, purchasing an existing home maybe the best option.

Classic Charm & Characteristics

While classic charm and characteristics can be added to a new home, it comes with a price tag. There is somethingto be said about an existing homes natural gum wood trims, hardwood flooring, leaded glass, and other classiccharacteristics that are not found in new homes.

Finding classic charm and characteristics can actually be done fairly easily when buying an existing home. If you’relooking for classic characteristics, a huge benefit to purchasing an existing home is that you should be able to findthem at an affordable price.

Cons Of Buying An Existing Home

Not Getting Exactly What You Want

One negative to buying an existing home is the fact you will likely not find a home that has absolutely everythingyou’re looking for. When buying an existing home, you must be ready to make sacrifices. Whether it’s the location ofa dining room or the size of a closet in a bedroom, a negative to buying an existing home is you cannot determine allthe details of the home.

If you decide to purchase an existing home, it’s recommended you determine what your wants and needs are in apotential home, before you begin looking. If you need to have a finished basement and a 2-car garage, make sureyou are prepared to give up other things that maybe something you wanted in a potential home.

Upgrade & Renovation Expenses

If you decide to buy an existing home, knowing that you will have to make changes is important. With the desiredchanges you want to make comes a cost. Having additional costs to upgrade or renovate an existing home can be adrawback to buying an “older” home. After buying a home, many home buyer’s don’t have tons of money remainingand may not have the money available to make upgrades and renovations.

Final Thoughts

The above pros and cons to both buying a new home or an existing home should be able to help you decide which isthe best option, if you happen to be on the fence. Whether you decide to build a new home or buy an existing home,it’s a very exciting time.

It’s almost a guarantee you will have many questions throughout the process, so it’s extremely important you havegreat representation when buying a home, even if you decide to build a new home. Make sure when buying anexisting home or building a new home, you know how to properly interview a buyer’s agent. Choosing a top Realtor isextremely important. A top Realtor will be able to guide you through the new construction process or the process ofpurchasing an existing home.

Other Top Home Buying Resources

Should I Build Or Buy a House? via Loans101.com

5 Tips For Buying A New Construction Home via ProStead Realty

Is It Best To Buy A New Home Or An Older Home? via Las Vegas Luxury Home Pro

What Happens After Your Offer Is Accepted? via Great Colorado Homes

How To Buy A Home | Top Real Estate Resources For Home Buying via Bundlr

Are you looking to buy a Rochester, NY home? Looking for new construction in Rochester, NY? If you’reundecided which option maybe the best fit for your situation, the above information should be able to help determinewhich is better. If you have any questions about the Rochester, NY new construction process or how to purchase ahome in Rochester, NY, contact me, and I’ll be happy to answer your questions.

Subscribe To Our Blog (it’s FREE) & You’ll Receive All The Top Real Estate Tips, Trends, News, and More in your e-mail inbox!:Delivered by FeedBurner

About the authors: The above article “Should I Build A New Home Or Buy An Existing Home?” was provided bythe Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinkingof selling or buying, we’d love to share our knowledge and expertise.

We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton,

Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush,Honeoye Falls, Chili, and Victor NY.

Visit our website at www.HiscockHomes.com.

© 2015, Kyle Hiscock. All rights reserved.