Looking to purchase a home and not sure if you want to purchase a new construction vs. an existing home? Here are the pros and cons of both:
Let’s start with new construction
1. It’s new!
You get to choose the floor plan, the finishings, the lot location, and no one has ever lived in it before you and your family.
2. The one year bumper-to-bumper
A new construction home comes with a one year (maybe more depending on the builder) home warranty. This means the builder will fix anything that’s wrong with the home for the period the warranty covers; including: appliances, HVAC, roof, cabinets, literally anything.
3. Builder’s lender incentives
New home builder’s lenders often offer money toward closing costs, the design center, sometimes they will even reduce the home price, and they can match the terms you would have with a bank lender.
1. The waiting game
The waiting time it takes to build the home if you’re wanting to move quickly. Now this can be solved by choosing what’s called an inventory home, but you may not get to pick all the finishings inside depending on how far along the home is in the building process.
2. Possible commute
A new home community could mean adding time to your commute. A lot of new home communities are moving further and further from the downtown area. But in this new era of working from home, post-COVID, that may not be a deterrent depending on your family’s situation.
Beware: at closing, your taxes are calculated based on an “un-improved property.” So, the second year you own your home, the home value will significantly increase, which could cause a sizable shortage in your escrow account causing your payment to increase quite a bit! There are ways around this, speak with one of our team members today to learn more.
Especially here in Texas, there are more and more new home communities popping up that could be a great choice for you!
Now, let’s discuss existing homes
Ever watch a Christmas movie and love the neighborhood it takes place in? If so, you’re looking for a home with a lot of character charm, and mature trees. This is exactly what you’ll find in an existing home located in an established neighborhood.
2. No wait time to move in
If you’re needing to move quickly for a job relocation, or a lease ending soon, purchasing an existing home eliminates the need to wait for it to finish being built.
3. Bigger yard potential
New homes are usually track homes, which have tiny yards so that the builders can fit as many homes as possible onto the piece of land they own. An established neighborhood usually boasts bigger yards for your kiddos to have more room to run and play!
1. The unknowns of the inspection
A risk of existing homes is that the inspection may produce some unwelcome surprises like mold or structural damage, you also might have to deal with replacing things like major appliances that would be covered in the new home warranty.
2. Style differences
An existing home has had a previous owner, who may not have enjoyed the same interior design preferences as you. This could mean you need to update paint colors, cabinet styles, kitchen styles, etc., which could be a lengthy and expensive process.
3. The timeline game
An additional stressor to the process can be the timeline game. Trying to sell your house before closing on your new home so that you’re not stuck with two mortgage payments can be extremely stressful! Need to avoid this problem? Reach out to our team today.
Bottom line, if you want to live in a home close to the city, that has charm and a story, and you don’t mind painting on the weekends, an existing home is great for you!
Have specific questions about new construction vs. existing homes? Use the form below and a member of our team will be in touch with you shortly!
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