Newly Built Home vs Existing
New Home Construction:
New construction means that the home is brand new and has never been lived in. There are inventory homes and build job or /to be built homes. An inventory home is a house that is built by the builder and is either move-in ready or will be completed within a few weeks.
Existing home sales is an economic indicator released by the National Association of Realtors. The data reflect the number of homes that have previously been constructed (and therefore accounted for by the new home sales indicator) and are now being resold.
Construction a new home costs an average of $300,000 while the average sale price of a new home is at $278,000. With these numbers, constructing a new home can result in net loss depending on how its dealt with.
Buying an existing home is at an all time low. Considering the costs it may be better to purchase a move-in ready home considering the financial downfalls of construction, moving, & building an entirely new home.
Repair & Renovations
Newly constructed homes don’t need any repairs, remodels, or renovations for an average of 7 years after completion. However an existing home can result in many problems. Taking into account needed repair & renovations might be a deal breaker if a home needs it. The ability to customize your home during a new home building process may take away the need for any major renovations.
Taking into account the changes needed on an existing house are extremely important when in the begging stages of purchasing or building a new home.
When purchasing an existing home, experts suggest adding the the cost of future repairs & renovations after getting it inspected by a professional. However sometimes old home layouts and designs can hold unique and historic architecture that may overrule any remodeling.
Additional Costs of Ownership
The purchase price isnt the only significant thing that is looked at when purchasing a home. More often than not there are also costs of owning the property that need to be considered. Since newer homes have superior insulation, technology, and building materials, it makes them more energy efficient and therefore less energy costs over time. Since older homes tend to be less energy efficient it results in them having higher monthly expenditures.
Condos and Town homes tend to be higher monthly since after 5-10 years these places tend to need many repairs, therefore driving up cost of maintenance.
Insurance also plays a huge roll in the expenses of owning a home. Generally, insurance companies have a lower cost policy on newer homes than they do on older homes. Depending on the location and property, acquiring home insurance may even be hard. Insurance companies prefer newer homes because they are more up to building standards and therefore can withstand more complications.
Ease of Purchase
Something important but often overlooked is ease of purchase, it may not be easy to qualify for mortgage. Post 2008, after the financial crisis, many lenders made the restrictions for achieving these loans much more strict. When applying for a mortgage, its expected to need to pass some test and qualifications.
Thinking about the financial complications of owning a home is important, however there are other things that are often overlooked. Location plays a big roll in the lifestyle your home will create for you. Depending on neighborhood, it will matter where the school is, worship area, hospital, etc.
Older/Pre-built homes tend to be in areas that are more established, so therefore have mostly built homes, settled families, a designated school, hospital, and store area. Newer homes may be in developing areas that are still trying to establish themselves. Researching the area, and the development may be in your best interest for finding the right location for your loved ones.
So Do You Buy A Newly Built Home or Existing One
These are among the choices that Americans have to make every day in order to fulfill their imagined lifestyle. Choosing between a New or Existing home is a completely personal choice and it comes with its own set of pros and cons for each of them.
If you’re looking for a home builder, or general home remodeling company, get in contact with EZ Builders in Los Angeles, CA – Set up an appointment for a consultation today & begin your new journey with us today.