First-time homeowners are faced with the quandary of whether they should buy a new structure or an older home. Listed below are several pros and cons to both.
The Existing Home
The pre-existing home on the market is already settled and has weathered many storms. It’s also offered, on average, at a much lower price. For many first-time home buyers, this can be very appealing. In many cases, first-time homeowners use all of their available funds to cover a down payment. Even if you consider just a $50,000.00 price difference, this can add up to substantial savings over the course of a typical 30-year mortgage. Another advantage of buying an older home is its uniqueness. Most new constructions, especially in developments, have only a few different floor plans, so they have the same layout. On the other hand, an older home generally has charming features like dormers in front of the windows, slanted ceilings, and unique window and room shapes. You can also negotiate over things like the price, repairs and the closing date.
Depending on the age and the condition of the existing home, that $50,000 in savings is just temporary. Having to replace or update major parts of the home such as the heating/cooling system and plumbing can run into a bundle of money. If the home was built prior to the 1990s chances are good that it has very little insulation and that the home has older windows and doors. This translates into higher utility bills and a loss of comfort.
One of the main reasons people purchase a brand-new home is to be the first one living there. There’s something about the smell of new carpeting or hardwood floors and freshly applied paint. Another advantage of buying new is that you can pick out the type of flooring, cabinets, countertops, and the quality of your appliances with the help of remodeling contractors. Additionally, you’ll have brand-new everything, so the roof, plumbing, and heating will last for years before they need replacing. They will also be energy-efficient thanks to insulation and new windows and doors. Your homeowner’s insurance will also cost less.
One of the biggest downsides to purchasing a new home is the price. When you encounter an older home that may have a listing price of a certain amount, you can often haggle to reduce the price. On the other hand, a new construction development has a limited number of homes for sale. In a soaring economy, these homes sell quickly and for the full purchase price.
Another con to buying new construction is the cookie-cutter style. If you’ve seen one home in the neighborhood, other than a few minor variations, you pretty much had the tour of every other home in that sub-division. Any changes that you make will have a tremendous markup and, as such, cost you dearly. Additionally, since the house is already up to date, you will likely lose money if you decide to sell within a few years. Buying a home is a decision that you should make very carefully. You should weigh the pros and cons as to the type of home, whether new or pre-existing, and your budget to make sure that whichever one you decide on, you’ll be able to afford comfortably. Remember, along with the mortgage, you will have many other household expenses to cover.