If you’re thinking about buying a home, you have a lot of decisions ahead of you. Among these are the many decisions about what kind of home you should buy. One of the first choices you should make is whether to look at resale homes, new homes or both. It may seem like that’s a decision that can wait until later down the road, but you should consider it early because it will make a difference in how you look at houses. Working with a Realtor is the best way to sort through the multitude of resale homes on the market, negotiate with the seller and handle all the details during the escrow period. On the other hand, if you decide to buy a new home from a builder, you should go to the sale office without a Realtor. You’ll have more negotiating room if the builder doesn’t have to pay a commission to your Realtor. Realtors usually only take their buyers to new homes if the builder is willing to pay them a commission. This means you could miss out on some new homes altogether if you just leave it up to a Realtor. Of course you can do both at the same time. Have the Realtor show you resales while you look at model homes on your own.
Buying a new home is very different from buying an existing home, in the property itself, the buying process and the neighborhood. Which way should you go? Here are a few of the factors to consider.
The process of buying a new home is very different than that of buying a home from a homeowner, especially in this market. Home builders are set up to make the process easy for buyers. They often work with lenders, title companies and others who all know what’s going on. You walk into the sales office and they can tell you about interest rates, tax and mortgage payments and everything. Many builders offer incentives in the form of closing costs or upgrades to get their homes sold. Individual sellers, on the other hand, are human beings, not businesses. They may be offended that you want a carpet allowance to replace the purple carpet. They may not have the cash to help you pay your closing costs. Worse, they may be in a distressed situation, like a short sale, and everyone will have to wait for their lender ‘s approval of every little thing. Every penny matters to the seller, so if your inspection turns up a major problem that needs to be repaired, it might jeopardize the sale.
New homes have all brand new components. New dishwashers, air conditioners, plumbing, roofs, etc. It will be quite a while before any of these things needs repair or replacement. Also, new homes are build to higher, newer building codes. This includes energy efficient features. New homes have the latest energy star appliances and improved insulation. These features can save you a lot of money on electricity and water. Older homes are more expensive to upgrade, especially features like insulation, which would require removing and replacing drywall. Many new homes now offer solar panels as an upgrade. Not only will this save on the electric bill, but it can be financed in the mortgage.
Be sure to consider all of your choices in buying a home for your family. If you are uncertain about whether you should buy a new home or a resale, look at some of each until you determine which is the better option for you.