If you’re looking for a new home, you need a house you and your family can build a future in. And what better time than now? The housing market is healthy. One important decision you’ll have to make: To buy an existing, pre-owned home or build a new one. Both have pros and cons. We dig into both sides in 5 main categories. Take a look below to help you with your decision:
Consider the 5 C’s
The average price of a new home is $275,500 vs. $204,200 for an existing home. While upfront costs are typically higher on a new build, there are other financial factors to consider.
- Upgrades: An existing house may cost less initially, but renovating and upgrading to fit your style can add up. The national average cost to remodel a bathroom is about $17,000 and the average cost for a major kitchen renovation is an estimated $57,000. It’s cheaper to make new homes safe by following IBHS’ FORTIFIED standards while building versus trying to retrofit an existing home.
- Maintenance and repairs: New homes don’t require as much maintenance and repairs as pre-owned properties do. In fact, 73% of Americans spend less than $25 a month on routine maintenance in a new home. And with updated appliances and newer plumbing, heating and air conditioning, you likely won’t have to worry about repairs for awhile. However, be sure to factor in costs for landscaping and window treatments for new homes.
- Appliances: While maintenance and repair costs may be lower, appliances do add to the total cost of a new construction. Existing homes may already have appliances and you may even be able to negotiate upgrades.
- Negotiation: Working directly with a builder could mean more wiggle room in your budget. Developers often offer discounts to encourage potential buyers to build. And they aren’t emotionally connected to the home like homeowners often are, so they may be more willing to lower the price. Keep in mind that financing a new home directly with a builder can be more challenging than buying from a well-known home construction company.
- Insurance: Typically, new homes receive lower insurance premiums when all else is equal.
If you’re on a tight move-in schedule, new construction may not be your best option. Consider that you’ll be finding and buying land, hiring an architect or builder, choosing a floor plan and designs – there are a lot of steps involved when building brand new. It takes an average of 5 – 6 months to build a home for sale from start to finish.
On the other hand, without new-build construction delays, an existing home could be move-in ready.
Also consider convenience of location. It’s easier to move into a pre-owned home in an established neighborhood. Unless you’re moving into a new development, you may not be able to build near the shopping, services and a school district you want.
There’s nothing like being able to design your dream home. Have that open floor plan or walk-in closet you’ve always wanted, plus the paint scheme and flooring of your choice.
However, an older home may have the charm and character you’re looking for. If you enjoy home renovation projects, you may find a fixer upper more satisfying. While the structures of pre-owned houses are already in place, you have plenty of opportunities for customization with remodeling.
The main appeal of a new construction is that it’s never been lived in and is in mint condition, right? That’s not always the case. To ensure your new home is in perfect condition, have the builder and a licensed home inspector review the property in early stages of construction and at the end. This way, any repairs can be made before you move in.
The same goes for a pre-owned property. A professional will be able to detect issues that can be easily overlooked, including:
- Damaged roof or faulty foundation
- Defective drainage system
- Pest infestations
When it comes to possible health issues, you likely have less to worry about in a new build. An older house poses the risk of having toxic materials, such as asbestos, lead paint or mold.
However, that’s not to say there’s nothing to be concerned about in a newly built home. Certain construction materials can release potentially toxic gasses, so choose materials that are healthier and environmentally friendly.
Both housing options have their pros and cons. When it comes down to it, it’s all about personal preference. No matter what you decide, making sure your home is safe should be your top priority. Learn how Nationwide homeowners insurance can keep you and your belongings protected.