When you’re searching for a home in the River Creek community or anywhere for that matter, you have one main choice to make between new construction and an existing home.
In 2020, around 87% of buyers went for an existing home, while 13% bought new homes.
There are pros and cons to each, so how do you know which is right for you? The following breaks down some of the things you have to keep in mind as you decide between the two.
The Costs
The biggest question that often comes up for people as they decide between a new and existing home is which is going to be less expensive. You might assume new construction is going to be more expensive, but the gap between new and existing home sales prices has narrowed in the past few years.
For example, in July 2021, the median sales price for an existing home was just under $360,000.
The median sales price of a new home in the same month was $390,500. Newly built homes tend to be around 15% more than existing homes, but that doesn’t tell the complete story.
Existing homes can require upgrades and renovations as soon as you buy them, depending on personal preferences.
You might have to make quite a few changes to get an existing home to meet your needs, so you have to factor this into your budget and decision-making. That 15% difference in pricing can quickly be eroded, depending on the existing home you choose and how you plan to make any changes.
Repairs and Renovations
This is what’s touched on above, but it’s a major downside of existing homes—repairs and renovations. Even if you’re going to keep a home as-is aesthetically, you might have to make significant repairs in a fairly short time after moving into an older home.
You’re very unlikely to have to do this with new construction. A new home isn’t likely to need any major repairs for at least seven years, and usually more. Plus, these are often covered under warranty.
You may also get the opportunity to customize your home when you’re building it if you go with new construction. For example, maybe you add close space or change your floor plan. This is going to eliminate the need to do anything when you move in.
To reduce some of the risks that can come with buying an existing home, you should have a property inspected before you buy. Then, that will help you start to factor in the cost of repairs and renovations when you’re looking at your total purchase price.
Charm and Character
One place where an existing home is likely going to come out on top compared to new construction is charm and character. Older homes may have design features that you can’t find in new construction, plus they may be in neighborhoods that are more established.
There may be more mature trees and shrubberies surrounding an older home. New construction neighborhoods tend to be barer and have fewer trees if any. There is also a tendency for newer neighborhoods to look cookie-cutter.
The lots in a new neighborhood may be smaller than in older neighborhoods too. If you want to charm or mature greenery surrounding a home, you’re probably not going to get much of either with new construction.
New construction is more likely to be in a neighborhood with an HOA, which can be an upside or downside, depending on what you want. Some people like the certainty that comes with an HOA.
They know that the neighborhood’s going to stay in good shape, and everyone will have to adhere to certain standards.
On the other hand, you have to pay an HOA, and you’re also restricted in what you can do with your own home. While some older homes are in HOA neighborhoods, it’s more common with new builds.
Additional Costs of Ownership
Once you think about the price of buying a home and then making any necessary updates, there can be some additional costs of ownership that come with an older home and maybe not new construction.
Newer homes are going to be constructed with more modern, higher-quality materials. That’s going to mean they’re probably better insulated and more energy efficient, so your monthly costs will be lower.
Another cost of ownership to consider is property taxes. Older homes may be less expensive, so the tax base may be different than for newer homes. Often, but not always, this can mean that older homes will have lower property taxes.
Homeowner’s insurance on newer homes will be cheaper than on older ones usually since the construction is up to newer standards.
If you’re buying an older home, it can be more expensive to insure it, and it may be harder to get insurance altogether, depending on the condition of the property and its location.
The Lending Process
When you buy a home, you have to think about the lending process and what you’ll qualify for. It’s more difficult now, following the financial crisis in 2008, to get approved for a new home loan. Lending is a bit easier for existing homes.
If you’re going to build a new home or wait for one to be finished, it takes time. If you’re starting from scratch, you’re going to have to deal with permitting and approval issues, the construction, plumbing, electrical work, and landscaping.
If you need to move quickly, an existing home is going to be the fastest path you can take. Buying and moving into a resale home can be a very quick process if needed.
There’s not going to be one right answer that’s appropriate for everyone when deciding between new construction and an existing home. There are pros and cons to each, from price to things like an established neighborhood with beautiful greenery.
It may be that you compare both options and get a feel for how each would fit your family without going into the buying process having made up your mind initially.