New Construction vs Resale: 10 Pros & Cons Of Buying a New House vs Used

Should You Buy a New Construction Home or a Resale?

When purchasing property, buyers must decide between resold or new construction homes. Both options have benefits and drawbacks, and buyers should consider these pros and cons before making this important decision. Here are the pros and cons of new construction homes versus resale homes.

Advantages of Buying a Resale Home

Buyers with a tighter budget or who want the chance to remodel may find a resale home is the better option.

Less Expensive Than New Construction

There are several reasons why resale homes cost less than new construction homes. The price per square foot is often less in a resale home because the new construction build has regulatory fees factored into this price. New construction materials cost more, whereas an existing home is already built.

Those buying a resale home might be able to negotiate the price with the help of their real estate agent, and that leeway does not exist with a brand-new house. Additionally, a resale home will typically require a lower down payment and a lower monthly mortgage payment than a new construction home.

Room for Improvement

A lower mortgage payment can mean more cash for buyers to spend on home improvements. Upgrading bathrooms and the kitchen with newer, more modern features and a fresh coat of paint can change the whole feel of the home and increase its resale value. Installing new windows in an older home can increase its energy efficiency, thus granting savings on monthly utility bills. Converting a basement or an attic into a living area can also add tremendous value to the home, should the owner ever want to resell it.

Drawbacks of Resale Homes

It's important to remember some potential drawbacks of purchasing a resale home, including the following considerations.

Potential for Expensive Maintenance

Surprises can and will come up regarding maintenance on a resold house. The water heater, the furnace's blower motor, the pipes, the roof, and other parts of the house all have a lifespan. When that lifespan runs out, it can result in a costly repair.

Unlike new construction homes, a resale home can have all sorts of things break down. Once the buyer owns the house, these situations are their responsibility.

Home Warranties Work Differently

Depending on the developer, new construction properties can have a builder's warranty that lasts between one and 10 years. On the other hand, with resale homes, the buyer is responsible for purchasing a warranty, also known as a home service contract, on their own. These home warranties will be similar to the warranties that come with new construction homes, but they may have some key differences, like a builder's warranty will typically cover all components of a home, including structural, while a home warranty may only cover appliances.

Regardless of what type of home you buy, make sure you read the rules of your home service contract or builder's warranty carefully so you know what it covers.

Potentially Lower Resale Value

Modern renovations often cost more than they add to the resale value of a home. For example, remodelling a bathroom might cost $15,000 but only add about $10,000 to the home's total resale value. The fact that resold homes are sometimes decades older can mean their resale value will decrease over time.

Benefits of New Construction Homes

Why to Buy a New Construction Home

The ability to customize, lower overall maintenance costs, and increased energy efficiency are some of the top reasons why buyers choose new construction homes. Here's a closer look into each of these factors.

More Customization

One of the main perks of buying a new construction home is having a lot of control over the property's features. Depending on the developer, they might have several floor plans for buyers to consider. Many features are customizable, from the front door to the light fixtures and the flooring. A new construction home can genuinely feel like a "dream home" when it's complete because buyers have some creative control during the process.

Lower Maintenance Costs

When buyers take possession of their keys and move into their new construction homes, everything is new, including the appliances, plumbing, HVAC system, and roof. Because everything is built to last with durable materials, new owners can look forward to several years without any expensive maintenance needs popping up. Maintenance surprises are more likely with resale homes, whether it's a problem with the pipes, a leaky roof, or a major kitchen or laundry appliance breaking down.

Increased Energy Efficiency

Builders typically construct new construction homes with a better design philosophy and improved energy efficiency. Today, they know much more about design concepts that make a more energy-efficient home. For example, insulation and other materials have significantly improved, allowing the house to stay warmer on the inside during winter and cooler during summer without increasing monthly utility bills. Energy efficiency is also better for the environment, and it saves homeowners a significant amount of money on utilities over the house's lifetime.

Disadvantages of New Construction

While the above advantages of new construction homes might offer enough reasons for a buyer to purchase one, they should also consider the following drawbacks.

New Builds Are More Expensive

New construction homes will always be more expensive than comparably sized resale homes. A model home in a development community showcases the best features and fixtures available, and these things cost more than the standard package. The price of materials can also fluctuate based on factors outside the builder's control, such as transportation and fuel costs.

More modern materials are also more costly than in older homes. Everything involved in building a new construction home costs more, which can be essential for some homebuyers.

Unpredictable Construction Timelines

Many variables can increase the time it takes to complete a new construction home. Specific tasks associated with the build can be delayed by the weather, for example. Shipments of materials can face delays, which can set things back even further. Supply shortages are not unheard of, and it can take more time to get the exact materials desired by the homeowner.

If the buyer expects to move in by a set date, there's always a chance it won't happen on time. Those buying new construction homes should be patient and must understand delays are always possible.

Think Carefully When Choosing Between New Construction & Resale Homes

Most buyers have different needs and budgets when purchasing a home. A resale property can be the better option for those wanting to spend less, while new construction is more customizable and more likely to be the home the buyer has always dreamed about. Buyers should weigh these pros and cons carefully when buying a home.

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