When determining the value of your home you need to look at the sales of those homes in your area that are most like yours - most similar in terms of size, number of bedrooms and bathrooms, and style of home. One factor that many people overlook is that in order to make a reasonable comparison to an existing home is that you need to compare it to other existing homes. Comparing it to new homes, even if they are identical, does not make sense. Here's why.
First are the financial reasons why a brand new home is different than an existing one. New homes often come with builder concessions, such as paid closing costs, if the buyer uses their preferred lender. New homes also have substantially lower taxes for the first year. Instead of paying the full taxes, their taxes are based on the lot assessment rather than the lot and improvement (home) assessment.
A home that is new also attracts an entirely different buyer than a home that is existing. There are buyers that decide that they are only going to buy new, therefore an existing home is invisible to them. Everybody likes something that is new whether it is homes, cars, clothes, whatever.
Last year I sold two homes that were basically brand new - just a few months old. The first was in Summit Ridge in Papillion. The owner had just bought it four months previous and was now moving out of the area. She bought it for $185,000. Of course she wanted to break even after paying the commission but realistically that was not possible - the home was worth at most $185,000. We listed it for $185,000 and it sold in 10 days for $184,000. The second home in Stone Ridge the seller had bought for $219,500 and turned around and put it on the market only a month after buying it. After having it on the market for about 60 days at $220,000 without a single offer, we reduced the price to $215,000 and we had three offers within the next to weeks and it sold for $214,000. Both of these are extreme cases of a seller needing to sell a nearly new home but they demonstrate that no matter how new a home is, if it has been lived in it is now an existing home, not a new one.
Pricing an existing home cannot be done by comparing it to new construction without making an adjustment for the fact that the home is used.
Trumm Team - Alliance Real Estate, Omaha, NE