Hidden Costs in Home Buying - New vs. Resale

By
Real Estate Sales Representative with Fieldstone Real Estate

Today I received an email from Toll Brothers linking to a blog about why you should buy a new home rather than a resale.... and they make a few points; but they miss a lot of points. "A" for effort! Hopefully the consumers reading the blog don't actually think about what it says - or doesn't say.

In this sheet, Toll Brothers gives you expected life expectancies of varying systems in homes, and their approximation of replacement cost. Generally speaking, they are right on about the average life expectancies. According to the estimate, over a 25 year span you could be spending $133,500... that's a little more than $5K a year in maintenance (that's regardless of whether you buy new or not - that's the cost to maintain a home over those years... and it's probably going to be more than that in our area). However, if you are buying a home, particularly a resale, I recommend you get a home inspection and hire someone that will provide you with a better estimation (based on the actual home you're buying) what maintenance or replacement items you should anticipate so that you can budget accordingly.

Aside from the predictable maintenance costs of any home (new or resale) there are other things to consider. For example:

  • Do you sneak to the kitchen for a midnight snack in your undies? If so, having window coverings in place might be a good idea. Resales usually come with them... new homes rarely do.
  • Most people repaint. For resales, most people repaint when they first move in to get rid of the prior owners taste in wall coverings and replace it with their own. With new homes, builders recommend that owners wait a year before repainting, so until then you need to live with the builder's choice of paint and the nail pops.
  • Yes, nail pops - That's why builders recommend you wait a year before repainting. At the end of a year, they will (usually) come back and cover up nail pops and other minor signs of settlement that are inevitable.... but they won't touch up custom paint, so waiting until after that 1 year walk through to repaint is a good idea, since you'll surely want to repaint after that is done. With resales, they are usually "settled" by the time you move in, so you're not as likely to find these kinds of issues.
  • Do you like to have clean clothes? Most of us do... and builders rarely include a washer and dryer. Most resales come with the laundry equipment.
  • Are you moving out of that stupid rental apartment to your own home so you can have a cook out on your own deck without the rental manager fussing at you? Well then, you're going to need a deck or patio. Resales commonly have decks or patios... New homes usually don't, and this is a big ticket item not included on that Toll Brother's list. Think $10-15K plus.
  • Maybe your motivation for moving is that you're ready to start a family, and whether you're starting your family with dog or a (human) toddler, you may find having a fenced yard would be a plus. There aren't many builders that include that in the cost of the home, in fact, many don't even offer it as an option. But in resales, you have a pretty good chance of finding a great yard with a great fence already in place.
  • Speaking of yards, do you like green grass and mature trees? This wish list item is also going to be easier to find in a resale. With a new home, the landscaping is all new, and takes much work to get established.

While buying a new home offers some advantages, it offers disadvantages, too. There is not one right answer for everyone. I am not trying to sway your opinion, just to point out some of the things you may not have considered... and things Toll Brothers certainly doesn't want you to consider when you're reading their blog or shopping in their models (where, by the way, you'll see lush landscaping and decks, and patios, and fenced yards, and custom paint and window coverings). I'm just sayin'.

***

Whatever the right answer for you, I am happy to help you make sure that you're buying, "eyes wide open" and not swayed by marketing materials and propaganda. That's the role of a buyers agent~to make sure you have the right information so you make the best choice for you and your family. Thinking of buying a home? New or resale I can help!

Vicky Chrisner, BUYERS AGENT

703.669.3142

   
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Patricia Kennedy
RLAH Real Estate - Washington, DC
Home in the Capital
Vicky, another concern with new construction is certainty about the builder's ability to complete the job. If he can't, what becomes of the client's deposit? A resale house is actually there, all finished.
May 28, 2012 08:53 AM #1
Rainmaker
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Vicky Chrisner
Fieldstone Real Estate - Leesburg, VA

Patricia - you are absolutely right... I didn't get into contract issues, but I will be writing one soon on the common contract clauses of new home builders.  What kills me is buyers would NEVER consider writing a contract like that on a resale, but their eyes get huge and they start jonsing for that new home... and they think the contracts are written for the extreme "what ifs" but it does happen often that homes aren't ready on time, or worse yet, they no longer qualify and the financing contingency has expired.

May 28, 2012 09:37 AM #2
Rainmaker
126,484
Valorie Stover, Realtor for Casta del Sol
Casta del Sol Real Estate / HomeSmart Everygreen Realty - Mission Viejo, CA
Mission Viejo,CA, Active Adult Community!

Your examples are so true and right on! Buyers need to decide what is improtant before they pick new over resale.

May 28, 2012 11:12 AM #3
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Patricia Kennedy
RLAH Real Estate - Washington, DC
Home in the Capital

Hey, Vicky!  I included this post in Last Week's Favorites.  Have a great week.

Jun 03, 2012 01:00 AM #4
Rainmaker
1,317,757
Joan Whitebook
BHG The Masiello Group - Nashua, NH
Consumer Focused Real Estate Services

A great post and you raise a lot of things for buyers to consider when deciding on a new home or an existing home.

Jun 03, 2012 12:15 PM #5
Rainer
284,468
Steven Cook
No Longer Processing Mortgages. - Tacoma, WA

Vicky -- great list of items to consider.  Very important to get the home inspection on the new home as well as the resale -- for some of the builders (subcontractors?) forget a few things along the way.

Jun 04, 2012 03:18 AM #6
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