The Home Buyer's Korner

Information presented should be used for educational purposes only.

October 17th, 2014

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New Homes vs. Older Homes

If you’re considering purchasing a home, you have two choices. You can buy custom built home or purchase an existing home with an eye toward either major or minor renovations.  Building a custom home or buying an older home both have their pros and cons and it’s important to understand what each offer.

Pros Of Purchasing An Existing Home 

House-NOLABuying an older home allows more money for larger parcels of land. With less development and the amount of available land decreasing, land is becoming more and more expensive. Buying an existing home, in most cases, provides more choices when it comes to location and lot size. 

If you’re looking for a larger lot an older home will net you more. Although few home buyers purchase homes based solely on price per square foot, an older home will provide more space than a new home. Construction supplies have increased dramatically over the years and due to this fact, the price per square foot has increased for newly custom built homes. 

Older homes often have incredible features. Depending on where you live, you may be able to find that unique home that will never be built again. With an older home, if you don’t like some features, they can easily be replaced with updates to add your own character to the property with several renovation tools like the FHA 203K or Fannie Mae HomeStyle program.  Even USDA Rural Development offers up to $10,000, that can be included in your mortgage for minor updates and repairs. 

With an older home you’re going to get a better yard. Trees have had the time to mature and offer wonderful potential with a little modern landscaping. 

Cons Of Purchasing An Existing Home 

Older homes are more likely to have maintenance issues than a newly built custom homes. The appliances are dated, aren’t as energy efficient, if at all and as they get older start to fail.  You may find yourself replacing a furnace or other major appliances sooner than if you purchased a newly built custom home. There can be electrical issues, lead paint, leaky roof, or termite damage. Be sure to do a thorough home inspection, so you know what you’re getting yourself into prior to buying an older home.  Even if you find  any of these issues, but love the home, consider talking with a general contractor and renovation topics covered in our blog. 

Depending on how old the home is, wiring and plumbing may need to be updated. Updating an entire home’s wiring is expensive and faulty plumbing could lead to leaks and hazardous mold issues. You can usually negotiate these types of repairs in your offer to buy a home, so be sure to employ a real estate agent who knows how to negotiate well for you. 

Any older home will likely need some sort of updating. If your dream home includes the charm only an older home can create be sure to calculate any needed renovation cost in your purchase price.  Our network members of real estate agents and general contractors are the perfect team to use when considering this avenue of home ownership. 

Pros Of Building A New Home 

new homeIf you hire a reputable custom home builder, maintenance over the first dozen years or sos should be minimal. One of the main reasons to buy a newly built custom home is if you simply wanted to avoid the potential of any major maintenance and avoid upkeep. 

Most custom home builders will warrant their homes for at least the first year and cover any repairs. New custom homes come with new energy efficient appliances and have manufacturer’s warranties. If your central air-conditioning or other major appliances were to fail within the first few years, the warranty would cover it, saving you major out of pocket expense. 

New custom homes come with all the basics that you’ll have to renovate if considering an older home. Things like updating light fixtures, modern cabinetry, and new carpet are great advantages when building a new custom home. New custom homes are also built to current building codes, which means they may be greener and could save you money on your monthly utility cost. Although with a little planning even the oldest of home can become just as energy efficient and a small footprint. 

The number one reason to build a custom home is a personal choice. You can choose your own lot and upgrades and the number one reason to build. Many home buyers simply can’t find exactly what they’re looking for in the market, so they build their dream home by employing a custom home builder. If you can’t get everything you want in an older home, build your own custom built home. 

Cons Of Building A New Home 

Many custom home builders, in order to save money, have few floor plans to choose from and newer custom built homes just don’t have the charm of many older home offers.

In order to build a new custom home you have to have enough time to get it built. A new custom built home can take months and even up to a year to build; and the price per square foot are going to be a lot more than an older home. 

Most custom home builders don’t put the cost of landscaping into their initial bids. If you want your yard to have a well established look with large trees you’ll have to most likely hire a professional landscaping contractor and you’ll pay extra for it. Most new custom home buyers build and don’t get the landscaping done for years after the completion of construction. Make sure you understand the costs of landscaping early in the process.

If you’re thinking of buying a home, be sure to hire an experienced real estate agent and do your homework. Home buying should be a great experience, whether you choose to build a new custom built home or buy an existing home.  Most of all have fun and don’t let the home buying experience stress you.

HOME OWNERSHIP TOOLS

FHA 203K

Your Home Purchasing or Refinancing & Renovation Tool

Mortgage Loan Officers, Real Estate Agents & General Contractors

are ready to assist you with your home purchase

FANNIE MAE HOMESTYLE

The Conventional Alternative to FHA 203K

Great for Real Estate Investors and Second Home Renovations

Mortgage Loan Officers, Real Estate Agents & General Contractors

are ready to assist you with your home purchase

USDA RURAL DEVELOPMENT

Up to $10K for Home Improvements, Renovations or a Simple Remodel

Mortgage Loan Officers, Real Estate Agents & General Contractors

are ready to assist you with your home purchase

A SIMPLE HOME SHOPPING INSPECTION TOOL

Organizing your home shopping experience affords a wise decision making process.

This simple home inspection tool makes your ultimate buying decision a smart one.

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