Should I Buy a New Home, or a Resale?

Should you buy a new home, or a previously owned one?

As with most things in life, there are pros and cons when considering a new home purchase and the answers will vary widely depending on your goals.  Here are some things to consider when weighing the option of purchasing a new home or a resale.

New home:

Choose your colors, flooring, appliances etc.  Depending on what stage the home is in, you may have the option of choosing the colors of your brick, trim and possibly interior paint colors.  You may have the option of the type of and quality of the appliances as well.  Want that whisper quiet dishwasher so you can watch the games without adjusting your TV’s volume?  Pay the upgrade, and you can have it.

With a new home, it should be years before you have to deal with the problems inherent in an older one; roofs that need replacing, AC and furnaces that need to be replaced, appliances, worn carpet etc.  The average roof in the Houston area lasts for 12-15 years.  The manufacture can brag about “30 year” shingles all day long, but I challenge you to find a roof that is 30 years old in this town. Oh, and one that’s 30 years old and not leaking.

The same goes for AC systems.  Typically you’re looking at 15 years or so.  That’s not to say one won’t last for 25 years, it’s just unusual.  By the same token, I’ve seen compressors burn out in a year. 

Energy savings can be substantial on a new home.  With technology of the new AC systems, construction techniques such as radiant barrier roofs, energy costs may factor in to your decision as well.  I saw a post on Facebook of a friend of mine who’s new home is probably 3,500 square feet that posted her power bill this last month was $72.  (Note:  I think they may have some solar panels as well.)

If you have a new home built, especially from the ground up, be prepared for a LONG process.  Typical build times here are 4-6 months, and sometimes more.  That’s with a tract builder.  It can be much longer for a custom job.  Believe me, it can test your patience.  Will you be here in the area where you can drive by your home to check its progress?

A downside to a new home can be getting the yard in shape.  Planting, nurturing etc are all part of a new home.  Not all builders sod the back yard.  Some only plant sprigs and you could be waiting a year for it to take root and grow.  You’ll also have to consider the cost of window treatments that you might not have to in a resale.

Here’s something to take into account as well; homeowners insurance.  Insurance costs are almost always lower with a new or newer home.  There are better discounts available. 

Remember too that with a new home, you may be subject to neighboring construction for some period of time.  Factor that in as well.

Resale home:

While you may not have the option to choose appliances, colors, flooring etc, you may on the other hand find some upgrades that you’d pay extra for in a new home.  A biggie for example is that of a pool. Having even the simplest pool built will set you back 18-$20,000.  That’s fairly low end too.  More commonly I see homeowners investing 30-$40,000.  Interestingly the resale value of a pool is extremely low so if you find a home with a pool already installed, you’ll usually not pay very much more than you would for the identical home without one.  If you’re insistent on a pool and have the option, I almost always recommend that you opt for a home that has one already.  Like a car, 3 years later, you’ll be lucky to recoup even 50% of what it cost.

With a resale home, you may be able to take advantage of the previous owners labor in the yard.  Some homeowners have a green thumb.  I’m not one.  Everything I touch dies, or runs away!  Although I have found it much easier to maintain once it’s there than to start from scratch.

How long will you live in the home?  This is a real important consideration.  If you purchase a new home and the builders have several years of building left, you’ll generally be faced with stiff competition from neighborhood builders should you find yourself in a position to sell.

While most of us don’t *really* know for sure how long we’ll be in a house, we usually have some sort of idea how long we’d like to be there.  Many people that I come in contact with, never really think about this.  How will it do for resale?  The time to think about selling a house- is when you buy it.  Have no kids, and you’re buying a 4 bedroom home on a busy street?  Just know that selling it later can be a challenge.

One of the homes that I personally purchased when our firstborn was a baby, had NO sidewalks in the neighborhood.  Neither me or my wife paid any attention to it.  Until after we moved in!  Of course, then you know who got the blame, right?  And it wasn’t my wife.

Again with the homeowners insurance, you need to check the insurability of a home in our area.  Depending on the county that the home is located in and the age of the home, there could be a requirement for a windstorm certificate on the roof, the building or both.  If there is not one, and one must be obtained, it’s a major pain to get one.

Email me if you’d like our free report; 7 Costly Mistakes Homebuyers Make and How Smart Homebuyers Have a Smart Home Buying Strategy.  Just put “7 Mistakes” in the subject line and I’ll get that right out.