Buying a home, whether it’s your first, second, or tenth, is a momentous occasion. And while there is much to be celebrated about taking ownership of your own parcel of the world, the decisions leading up to signing on the dotted line can be somewhat stressful. After all, a home is the single largest purchase most of us will make in our lifetime, and we want to make sure we make as few mistakes as possible.
One of the biggest debates when choosing a home is whether to look for something new, or pre-owned. Of the 5.51 million homes sold last year, over 600,000 were new construction, a staggering number considering just how many existing homes there are. Clearly, home buyers are divided on what makes the most sense.
So, before you start running from listing to listing like you’re on an HGTV special, brush up on the good and not-so-good news about new versus existing homes.
INITIAL COST
As it turns out, there is a lot of debate about whether new construction or pre-owned homes are less expensive initially. And while the fact is that either could be true depending on the home, location and desired amenities, there are a few things every home buyer should know about the initial price tag.
New construction
Good news: New construction in suburban areas tends to cost less than equally-sized existing homes closer to the city, thanks to more readily-available property, and large-scale development.
Bad news: Expect to fork out money for finishing touches like window treatments for privacy and landscaping. While you might not love the blinds or garden design at an existing home, you can always update them down the road.
Pre-owned
Good news: Pre-owned homes cost up to 20% less than a comparable (size, age, and neighborhood) new home. A big discount no matter what your budget is.
Bad news: Recent reports show the supply of available homes comes up about 50% short of market demand, so be prepared to act quickly if you want to avoid a bidding war.
UPKEEP
Roofing, plumbing, and foundations are just a few potentially big-ticket items to examine when house shopping. Looking past the initial excitement of a purchase, it’s important to know what you can expect in the way of upkeep. Here are the facts.
New construction:
Good news: Depending on where you live, developers can be legally required to provide builder’s warranties on new homes, which goes a long way towards your peace of mind.
Bad news: There are plenty of horror stories of less-than-honest builders cutting corners. From poorly plumbed toilets to missing insulation, new homes aren’t foolproof, so be sure to get an independent inspection.
Pre-owned:
Good news: If your inspection report shows big-ticket items like roofing, water heaters, and sump pumps will need replacing soon, you can negotiate that into the purchase price.
Bad news: Annual maintenance costs 1-3% of a home’s purchase price on average. And as you might expect, an existing home will likely be on the higher end of this.
AMENITIES
Surprisingly, new and pre-owned homes seem to be split right down the middle when it comes to offering the latest creature comforts. Thanks to a booming remodeling market, you’re almost as likely to find that remote-controlled Jacuzzi tub in a pre-owned home as you are in something brand new. Here are the specifics:
New construction:
Good news: New construction presents buyers the opportunity to pick and choose the upgrades that matter most during the building process. The only limitation is your imagination (and budget).
Bad news: It’s easy to go overboard with upgrades. Plenty of new home buyers have wound up with a final bill thousands of dollars over the original cost of the home after adding extra luxuries.
Pre-owned:
Good news: Even if an existing home is missing the touchless kitchen faucets you wanted, adding modern conveniences is only a phone call away.
Bad news: A single remodeling project runs well over $10,000 on average, so buying an older home in need of a lot of renovation can become an expensive proposition.
UTILITIES
Like many homeowners, you might wonder what your next home’s monthly heating, cooling, water, and electricity costs will be. And for good reason, as the average annual cost of utilities is around $2,200 per household. As you might expect, there are some stark differences between new and pre-owned homes when it comes to conserving energy.
New construction:
Good news: Thanks to a growing emphasis on responsible home building, new construction is much more likely to be LEED certified, and utilize waste-minimizing faucets, appliances, and fixtures.
Bad news: Though new homes may offer energy-efficient solutions, expect to pay more upfront for those eco-friendly options.
Pre-owned:
Good news: Even if you’ve fallen in love with a pre-owned home that isn’t retrofitted with the latest energy-saving tech, you can always upgrade down the road. Call in a professional if you aren’t big on the idea of trying to tackle projects yourself.
Bad news: Lowering your utility bills by modernizing an older home requires patience, as it can take a long time to recoup the cost of energy-saving solutions.
Even if you think you’re staying put, there is a good chance you’ll have to consider the pros and cons of new construction versus pre-owned homes in the future. According to recent data, the average American moves more than 11 times over the course of their life. So, when time to relocate comes, keep this list in mind and find the house that fits you best!
Maplewood Plumbing has proudly served the St. Louis and surrounding communities for over 30 years. As your trusted professionals, we offer full-spectrum plumbing-solutions, from drain cleaning to full remodels. And we work in both older homes and new construction. If you have questions about your current or next home’s plumbing, contact us today.
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