You finally did it. After months of getting your credit in order and saving for a down payment, you have a pre-approval letter in hand. You now understand how much home you can afford and have buying power over the competition.
But before you start browsing listings and attending open houses, you must ask yourself whether you prefer an existing home or a new construction home. We get it — nothing compares to the feeling of walking into your newly built residence for the first time. What many buyers fail to realize, though, is that an existing home may be the better option for them.
Let’s take a look at the advantages and disadvantages of purchasing a brand-new home.
Reasons to build your house
- Personalization – Having your home built from the ground up means you get to customize things based on your needs and budget. You’ll work with your builder in personalizing the details of your house such as cabinets, flooring, countertops, and more! We recommend setting a budget for upgrade costs early in the process, as they can add up quickly.
- Modern floor plans – You’re pretty much guaranteed a modern floor plan with a new home. If you’ve always wanted an open layout for hosting loved ones, you can easily make it happen. Buyers will also appreciate that today’s new builds let in plenty of natural light.
- Newness – It goes without saying that everything in a new construction home is, well, new. This includes windows, siding, appliances, the roof — you name it. Speaking of appliances, the ones that come standard with the home should be covered for at least a year under manufacturers’ warranties.
- Efficiency – Don’t think that a home’s outdated appliances and technology will matter much in the long run? Unfortunately, you’ll notice the difference when you receive your first utility bill. Rest assured that new homes are more energy-efficient and incorporate the latest technology, which translates to less maintenance and lower utility costs.
- Amenities – Builders know the expectations of today’s buyers. If you’re hoping to start a family soon, chances are you’ll want amenities such as parks and schools nearby. You may have a more difficult time finding an existing home that aligns with your lifestyle.
Downsides of a new build
- Design limitations – It’s common for builders to stick with designs that appeal to the most customers. While you’ll have some customizable options, don’t be surprised if your final layout mirrors that of your neighbors. Zillow suggests using post-purchase decorating and painting to make your home stand out.
- Landscaping – You may run into some landscaping challenges depending on what time of year you move into your new place. For example, it’s probably not reasonable to expect a beautiful green lawn if you’re closing in August. There’s also the fact that any trees will take years to fully mature.
- Cost – According to Forbes, new homes can cost up to 20% more than a similar existing home. What’s just as telling is that there isn’t much wiggle room on the purchase price or closing costs. So if you do move forward with a new build, remember to account for the down payment, upgrades, and closing costs. It’s worth noting that because of historically low inventory levels of existing homes, builders don’t feel as pressured to provide incentives for buyers.
- Less space – Perhaps you’ve dreamt of having a home with a big backyard and lots of space between you and your neighbor. We hate to be the bearer of bad news, but new homes are often built on smaller lots than most older homes, as referenced from Forbes. The possibility exists that you’ll have to choose between an existing home with a huge yard and a new construction property with a smaller yard.
- Waiting – Ask someone who moved into a new home and they’ll likely talk about construction delays. This is especially prevalent in Colorado, where Mother Nature can throw off completion dates at any time of year. If you’d rather not wait for your home to be built, opt for an existing dwelling instead.
Not your average realtor
At American Home Agents, we understand the pros and cons of buying a newly built home. It’s why our realtors spend the time getting to know clients and figuring out which type of home makes the most sense for them.
Ready to begin your home buying journey? Contact us at (303) 695-5900.