March 10, 2018

Should I Buy a New Home or a Resale?

By Jessica Elgin, REALTOR

When you are looking to buy a home, there are several things to consider. One of the first, is to determine if you want to buy a newly built home or if you want to buy a resale. Here are a few things to consider.

Home Warranty. Home warranties are always available. Most builders will offer a 2/10 warranty, meaning 2 years on the inside and 10 years on the structure. Resales have similar warranties available, but the coverage is not as extensive. The most commonly selected home warranty for a resale is one year. All home warranties can then be extended at the end of the purchased policy, and the price is determined by square footage.

Selection. When you purchase a resale, you have to choose what is already there. New homes offer a variety of floor plans and options so that you can make the home your own. If you need to see what it will look like, larger builders have models. When working with a smaller builder, ask them to see one of the homes they previously built.

Interior Design. In a new home, you will often need to pick out all of the blinds, carpet and interior colors, along with planning to complete your back landscaping. For some, this is the fun part of the process. For others, this can be daunting. Budget is important to consider in this process. Many of the options will have an added expense. When choosing a new build, be sure to consider what you qualify for when you choose your base floor plan. In a resale, your sellers sometimes offer an “allowance” or suggest they will let you pick the flooring or paint and they will make the changes prior to close. Remember to work closely with your lender to see what types of restrictions there may be with your loan type.

Move In Date. When you purchase a resale, most contracts are designed to close between 1 week and 2 months, depending on your financing situation and the personal situation of the buyer and seller. If you are planning further ahead, new builds have a little more flexibility. Larger builders work in phases. They will build out certain sections of a community first, then move to the next. If you know when you would like to move in, you can choose the phase that best fits your needs. And, if you are purchasing a lot and having a smaller builder complete the construction, you can sometimes plan several years out.

Dust and Appreciation. New homes do mean construction areas, lots of noise, and lots of dust. If you are building in a subdivision, it is likely that new homes will be built for a few years after you move in. Be sure to ask about what is being built around you. And, when looking for a resale, look around to see if there are any empty lots that might have homes built on them later. The biggest benefit to dust is that it is usually accompanied by appreciation. The largest increase in appreciation in a subdivision is typically seen in the first 5 years. So, if you can stand a little dust, you will likely see a financial gain.

In the end, it is possible to get what you want with either a new home or a resale, and it comes down to personal preference. Many like the charm of a resale, while others prefer to start with something that is entirely their own that no one has lived in before.

For more information on this, and other real estate topics, visit me on StGNews.com, ERA.com, or Facebook @JessicaElginRealtor.

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