Newly built homes appeal to buyers for many reasons, one of the most important being that they have no issues from previous owners. Whatever the reasons are though, if you're considering buying a brand new home, it's crucial to understand the good and the bad. Let's take a look at the pros and cons together:
The Pros
1) Interior & Exterior Customization
You get the luxury of laying our your home the way you want it to look! Some builders offer pre-designed packages with layout and color scheme options. Working with a custom builder will allow you complete freedom with every choice, from light fixtures to flooring layout.
2) Pristine
Every detail is clean, shiny and untouched. Everything in that new place was put there for your specific use.
3) Work Is Done For You
Unlike pre-loved homes, new construction homes were taken care of by professionals. You didn't have to lift a renovating finger - your home is move-in ready.
4) Energy Efficient
New homes often take up the advantage of innovations in energy efficiency. Pre-designed packages can include builds specifically designed to use less energy through insulation, heating, cooling and household appliances. In a custom build, you'll have more say about what you're looking for when it comes to reducing your carbon footprint and energy bill. In addition to the home's systems, you can pop in energy efficient windows, LED lights, dual flush toilets and/or smart thermostats.
5) Lower Upfront Maintenance Costs
New builds aren't invincible. You know that you'll need to repair something eventually, but with a new home you know that the chances of needing to fix a crack in the foundation are significantly lower than that of an older home. This means you'll be spending a lot less money in the first few years of home ownership on maintenance (not to mention stress). Also, most builders include a range of warranties with their homes, including a short-term full structure warranty and a longer-term exterior warranty. It's a huge financial benefit and a relief in the years following such a major purchase.
6) Modern Technology Accommodations
The latest technology and wiring comes built right in - alarms, speakers, internet, cable, etc. This saves you time, money on electrical upgrades, and it saves your walls from extra holes.
The Cons
1) Location
The majority of new homes are built in new areas. This means that they are going to be further away from existing schools, retail shops, grocery stores and health clinics. In addition, you'll be signing up to live in a construction zone for the next couple of years. Your neighbour's lot may be also be closer to you than in other developed areas. If amenity proximity, natural foliage and space are important factors in your home choice, a new build may not be for you.
2) Building Experience
From builder to builder, their policies, skills, options and processes vary. This means that your experience can vary. Sometimes the builder with nice pictures on their website turns out to be less professional than they look, giving you one heck of a headache. Ask as many questions as you can, thinking of all the details you can. This way, you can be sure the builder you're choosing knows their stuff, and will help your homeowner journey - not hinder it. Talk to homebuyers that have previously built with them, and make sure no significant complaints have been filed against them.
3) Price
The first price you see when choosing a newly constructed home is the property's base price. This usually includes just the structure and lot, without any optional add-ons. It also includes the standard finishes, which are probably not the highest quality options. In this case, you'll likely choose some upgrades - like hardwood flooring instead of carpet for example, or kitchen upgrades and recessed lighting. This will drive up the price of your home. When all is said and done, the price you are left with is what you'll pay. Comparing that to pre-owned homes, where the price is set by the market and by the previous homeowner, who may or may not understand the actual value of their home, you can pay less than the price that's listed. Negotiation is a rational part of the process, which is exempt from new homes. On the other hand, your home builder may offer a discount or incentive for choosing them.
4) Higher Initial Cost
Home builders don't typically lower base prices on newly built homes, since it can alter the comparables of the overall development. This means your brand new home could cost up to 20% more than a similar existing home.
5) Landscaping
Landscaping and even driveway options are either an upgrade, or you may be responsible. Either way, it's another cost that you'll need to figure in to your plan.
6) Good Ol' Sweat Equity Doesn't Exist
There's just something about putting in work yourself that bonds you to your home. Not only that, but adding value to the property. The thrill of finding a good deal on an older home and DIYing your way into a value increase doesn't exist with new builds. This is the downside of move-in ready.
Overall, make sure you look at both the pros and cons before going ahead with the decision to build a home for yourself. Considering every factor is what will make you a smart homeowner and a savvy investor!
Posted by Admin Staff on
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