Buying real estate for the first time seems like too much to handle at first glance. However, a steady approach is the key to making the right decision. And while new houses or condos might seem like a no-brainer at first, they do have certain flaws when compared to resales and vice versa.
The choice between these two options comes into the picture quite early and is affected by a variety of personal factors, which include your financial situation, lifestyle and other preferences and priorities. Let’s focus on the most common differences between new and pre-owned real estate that will help you shape your own opinion.
Category: Market value
New homes: 1
Pre-owned homes: 1
If you previously had to deal with buying or selling a used car, you already know that some market rules are quite universal and can be applied to a number of categories throughout the market. Just like a used car becomes less of a desirable purchase with every resale (of course, there is a number of certain exceptions), your house’s value on the market is affected by a myriad of factors, one of which is its age. And while you may plan to live in your next home for many years to come, it is always better to plan ahead and be aware of the changes that might happen along the way and will force you to part with your home. And while any pre-owned home you will be selling will no longer be new, a five-year-old home is sure to be more desirable than a ten-year-old one.
Another way to address this issue is to acknowledge the fact that a pre-owned home already has its own history and a most-likely settled environment with fixed real estate prices, while a new property is more of a pig in a poke, since you cannot predict what is going to happen to the development and the surrounding community in the future: will the price plummet or shoot up – it is hard to predict future market appeal, so sometimes it is better to consider something with a bit more history, as it makes it easier to make predictions.
Category: Approach to the geometry of living space
New homes: 2
Pre-owned homes: 1
If you are looking to really let your imagination run wild, which you most likely are, a new home is an ideal canvas, because when you buy a resale house, you get what’s already there. Ceiling heights, floor plans, bathroom and kitchen fixture, lighting, and wiring layouts that has been put together by someone else a year or five years ago from now will only be getting in the way of your creative genius and will be draining your wallet too.
Even state-of-the-art designer furniture and high-tech appliances will be unlikely to liven up an outdated living room or kitchen with a low ceiling, small windows, and dusty pantries. As a result, you might find yourself investing substantial sums of money into tearing down walls and creating flow-through spaces that are so common in the majority of newly-built nowadays.
A new home, by comparison, will allow you to actively participate in the design of interior spaces with the builder, in advance of actual construction. In addition to that, many modern homes come with complex wiring systems that ensure the right functioning of the sophisticated electronic systems, such as high-speed internet, communications, entertainment centers, and security systems.
Category: Energy bills and environmentally-friendly living
New homes: 3
Pre-owned homes: 1
New homes normally come with better air filtration compared to their older peers. As a result, indoor air quality is much better in new homes, which reduces the symptoms for people with allergies and respiratory system diseases.
Modern homes are built with a thought about the environment, and whether you care about your house being ‘green’ or not, homes built today are required to meet far tougher national code standards for energy efficiency than those that have been just a few years back. Most importantly, newly built homes actually come with energy certifications that cover roofs, walls, doors, windows, and appliance packages. Obviously, most resale homes offer no such certifications because they were built from several years to decades ago when this simply wasn’t a priority.
Of course, pre-owned homes can be modified, but in this case, you are, in fact, paying even more, and it can be quite pricey, especially if it requires redesign.
Category: Mortgage financing
New homes: 4
Pre-owned homes: 1
The first thing you have to keep in mind is that you are dealing with two different types of people when you are buying a new or a pre-owned house. And while sellers usually have too much on their plate and are generally quite limited with what they can offer on their side finance-wise, builders often have mortgage subsidiaries or affiliates which allow them to be more flexible when it comes to payment structure.
For example, builders have an ability to customize your payment structure to suit your specific needs and abilities: down payments, other loan fees, and even interest rates can be modified. Sellers, on the other hand, may be willing to offer contributions to settlement charges, but it doesn’t happen very often, and you cannot really predict the outcome, which makes resale purchases more energy-demanding and requiring more effort on your side.
