SHOULD I BUY A NEW HOUSE OR A PRE-OWNED HOUSE?"

THE PROS OF NEW HOUSE

• Warranties: Most builders offer a “bumper to bumper” one year warranty and ten year structural warranty. You also have the manufacturers’ warranties for appliances, water heater and HVAC system. This can give you a lot of peace of mind.
• Fewer repairs and no remodeling: Since everything is new, you probably will not have to be paying for repairs for the first years.  And since everything is new, chances are that you won’t want to do any remodeling. 
• Layout: Open concepts are more popular now with larger family rooms instead of both family and formal living room. - larger homes still have both.  Some 2 story homes also have a loft or game room upstairs which older homes don’t use to include.
• Amenities: Newer communities often include a pool, trails and/or gym. 
• Energy-efficient: New construction techniques include more energy-efficient features like modern appliances, windows and insulation. 
• Customizable: When you purchase a new home, you can often customize it to suit your personal needs and preferences. You may be able to choose things like paint colors, types of appliances and whether the house is carpeted or comes with tile or wood floors.
• Resells: All the above pros can make it more appealing during the resell.

THE CONS OF NEW HOUSE

• Higher price: Since everything is new you will likely pay a higher price than you would if you chose an older house of equal size and lot size in a comparable location.
• Higher HOA fees: Community amenities like pool, parks, trails and/or gym require upkeep by the homeowners association (HOA). Keep in mind having an HOA can help maintain the value of your home since the community is better maintained.
• More similar homes: New neighborhoods tend to look very similar. 
• May have a longer commute: Most available land is outside of the city. 
• Limited or no negotiating room: There’s little room for negotiation.
• Little to no landscaping: New homes may require extensive landscaping, which can take a lot of time and money to complete.

THE PROS OF PRE-OWNED HOME

• Faster closing time: The average time it takes to buy an existing house is usually faster than purchasing new construction.
• Lower prices: Older homes tend to need a little more TLC than new houses, and they may require major updates.
• Established neighborhoods: Pre-owned homes tend to be located in more established areas.
• If the home was maintained, many repairs have already been made: Some people claim that resale homes are money pits, but you may find houses that have already been updated. Since the house has been lived in for a long time, it’s likely that most major issues have already come up.
• Fully grown shrubs and trees: When you purchase an older property, it’s likely that the home already has mature landscaping and won’t require a ton of time for extensive upkeep.

THE CONS OF PRE-OWNED HOME

• More maintenance and repairs: You may need to replace the roof, a new HVAC system or replacing worn carpet.
• Less energy-efficient: A pre-owned home was built with older materials: windows, insulation, etc. 
• Older appliances: Usually not stainless steel and with fewer features than the new ones.
• Smaller: The average floor plan size has gradually increased over time. According to data from the Census Bureau, the median single-family home size was 2,333 feet in 2020. In comparison, the average single-family home was 1,525 feet in 1973. Also older homes often come with less storage space, smaller bedrooms, and don’t have a primary bedroom.
• Could contain hazardous materials: Until fairly recently, lead and asbestos were commonly used to construct residential homes. 
• A home warranty may not cover replacements: Many people will purchase a home warranty to cover any necessary updates to appliances. But if the previous owner poorly maintained the appliances, your home warranty company may refuse to pay for those updates.

Other things to consider...

Get Your Financials in Order

Now is not a good time to make sudden career changes or large purchases. You want to approach your property purchase from a position of financial stability. Large purchases or loans can affect your credit and balance sheet in a way that can limit your buying options. Your credit score will hold a significant impact on the type of property you can buy, your interest rate and overall property price. We can work with one of our preferred lenders to get an updated credit to know exactly where it stands. The lender will research your credit ratings from the three credit reporting agencies Equifax, Experian and TransUnion. We are happy to recommend seasoned, knowledgeable lenders in the residential, construction, commercial and investment real estate fields.

Organize Your Finances

When it’s time to make an offer, you’ll want to know you’re fully prepared to close the deal. In order to avoid delays, bidding wars, or conflicts, preparing your financials is crucial.

• Bank accounts
• Recent pay stubs
• Check Your Credit Rating
• Financial statements
• Investments
• Tax returns for two years
• Credit cards
• Auto and other loans
• Copies of leases for investment properties
• 401K statements, life insurance, stocks, bonds, and mutual account information

Prequalify

Pre-qualifying for a loan will help you with the following:

• Finding the ideal price range you can afford
• Determining what your monthly payment will be
• Understanding the different loans you qualify for
• Estimating the down payment and closing costs