Everyone has a preference when it comes to the type of house they desire to buy. Some like older homes in established neighborhoods with character. Others prefer newly built homes that are custom made and they like being the original homeowner. If you are the person who likes the older existing homes, let me break down the pros of buying new construction versus buying old.
Incentives: Incentives are bonuses or extra perks offered by the builder at the time you go under contract. Builders usually offer a 10 year home warranty, free closing costs, free upgrade for the kitchen appliances, and other necessary rewards. When buying an existing home there is more competition from other buyers, therefore the sellers are not usually willing to offer much other than the home.
Buyer Control: A well qualified buyer is always in control and more in control when a builder can provide the exact house you want. You simply have your realtor make an appointment with the builder. You tour the model homes and select the custom features that you desire. You review the builder’s terms, go over completion dates, and sign the contract. Simple, right? With existing homes it is not as easy. Buyers are not in control with existing homes, the market is in control. If there are not many existing homes listed for sale, then there will be multiple buyers looking at the same houses. With multiple buyers the sellers are not so willing to negotiate and there goes your dream home.
Surprises are Rare: There are very limited surprises when buying a new construction home. The only surprise that often occurs is the completion date being rescheduled. When buying an existing home you have to get past the due diligence period before negotiations are complete. The inspections, appraisals, insurance quotes, and any other investigation is the due diligence period. This is where the surprises come in because every seller may not be willing/able to negotiate on repairs or appraisal amounts, this could terminate the contract. With new construction most of these investigations are complete by the builder because they want to guarantee they are giving you a perfect house.
If you are in a market where the favor is always in the seller’s hand (multiple offers/over-asking price offers) then consider a new construction home for the incentives, to stay in control , and eliminate some of the surprises. Of course, if you truly love existing homes there are still options to guarantee you get the home of your dreams.