Buying New Versus Resale

In today's highly competitive market there is a vast array of choices to be made when deciding on the type of dwelling you wish to reside in. This article will focus on the advantages and disadvantages of buying a new home versus a resale home.

Advantages of a New Home
One of the primary advantages of buying a new home is the ability to decorate your home from the beginning exactly the way you want. You can pick all the colors, which range from paint to carpet. You can also make the tile and cabinetry selection for the kitchen and bathrooms.

Often times, new homes will have more modern conveniences, better insulation and can be more energy efficient.

Disadvantages of a New Home
Unfortunately, with a new home purchase you should be prepared for the on-going construction you will find around you. Chances are that your lawn will not be in, your driveway will be gravel and your street will turn into a sea of mud whenever it rains or snows. If things are going to go wrong with a newly constructed house, they will appear in the first one to two years. As the house settles you may find cracks appearing in the walls of the basement.

There are additional expenses associated with new homes that you will not typically find in a resale home. For example, you may have to spend money for appliances, curtains, drapes, landscaping, air conditioning, etc.

Closing costs are typically higher for new homes. The purchaser will pay for such additional costs as the New Home Warranty Program, tree planting, utility hook ups and paving of the driveway.

Usually, when you buy a new home, you don't have an opportunity to see the actual layout. All that is provided is a blueprint and in many cases the end product may be a disappointment to the purchaser. Additionally, there is the uncertainty as to who will be your neighbors.

Advantages of a Resale Home
The major advantage of buying a resale home is that you are moving into an established neighborhood. Your lawn is green, your shrubs are growing, your driveway is paved and your trees are well enough established to give your street a feeling of permanence.

In terms of investment, a resale home will often give you more for your value than a brand new home. Many owners put thousands of dollars into home improvements ranging from small items, such as landscaping, to major projects, such as a finished basement. Although these improvements will make the home more attractive to potential buyers, they may not increase the market value of the home. A $30,000 swimming pool or a $12,000 finished basement or even $5,000 worth of shrubs may make the home very attractive. However these additional costs incurred may not necessarily increase the market value of a home. The buyer gets the home at its real market value, which is based on comparable homes for sale or sold in the neighborhood. All those expensive extras may come to the buyer at little or no cost.

With a resale, the vendor's asking price is almost always negotiable downwards unlike the builders list price which is usually firm. Any extras or changes are added to the list price of a new home.

Disadvantages of a Resale Home
A small percentage of homes in the marketplace are not considered to be in move-in condition. If both live-in partners happen to be working at full time jobs, a move-in condition home is by far the best alternative. If the property is being under "power of sale" or the property has been rented for many years the home may require a lot of work. If the buyer is not handy or does not have the additional up front capital then the purchaser would be better off buying a home in move-in condition or a brand new home. Additionally, as a home gets on in age certain systems such as heating, cooling, roofing, and/or windows need to be upgraded.

This being said, a home that needs some fixing up can in fact present some advantage to a buyer. Namely, it can be purchased below the going market price, while at the same time providing an opportunity to have it decorated to suite ones specific taste.

Conclusion
In today's market place both new and resale homes are selling briskly. Once you've evaluated the pros and cons of each alternative, you can make an intelligent, educated decision as to which option is best suited for your particular needs.