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New homes usually cost more than existing homes. However, new homes may be less expensive in the long run because they require less maintenance and are more energy efficient. New homes can also be easier to live in because of the modern floor plans and the amenities that are often missing in older homes. Also, most existing homes have some deferred maintenance that can take a lot of time and be expensive to repair.
But, living in a new housing development isn't for everybody. Some people complain that new developments lack architectural style and mature landscaping. For others, new homes are less convenient because they are often located far away from the city center. There's the noise, dust and traffic while the construction is in progress. And bad weather delays may cause your brand new home to not be finished on time.
Builders pre-sell new homes from furnished models of the various floor plans. The model homes are highly upgraded and do not depict the standard finishes (floor coverings, countertops, appliances, fixtures, etc.) that are included in the base price. So the crown molding, stainless appliances and marble flooring you fall in love with are not included in the base price of the house. You'll have to pay for these and other extras.
HINTS:
- Before you buy a new home, take a look at a basic production home to see the standard finishes that are included in the base price.
- Compare the prices charged for upgrades. You may be better off installing them at your own expense after closing (especially flooring.)
- Reserve the right to rent back your existing home after closing. That way you won't have to move twice if your new home is not delivered on time.
- Make your construction changes early because it will be very expensive after the builder's cutoff date.
- Even new homes have construction problems. So, talk with other owners about how responsive the developer is on customer complaints.
- In a strong real estate market the price of a new home will not be negotiable. In a softer market, you may be able to get concessions toward closing costs and upgrades.
BONUS HINTS:
- Pick your upgrades wisely with resale in mind.
- Keep your new home finishes light and neutral because dark colors may limit the buyers at resale time.
- The best upgrade investments include a fireplace, french doors, security system, fans, an extra garage and bonus rooms.
- Floor plans with a bedroom and bath on the main level are very good for resale.
- Upgrading the kitchen almost always pay off where a gas range, better cabinets and granite counter-tops are a wise choice.
- When it comes to flooring, wood and tile floors will usually pay for themselves at the time of resale.
- Options that will usually not pay off include: air conditioning, a pool or spa, dark colored flooring or cabinets.
- Choose conventional window coverings such as wood blinds. Shutters are popular but usually will not pay back. Expensive draperies and other custom window treatments will not pay for themselves at resale time.
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