Pros and cons of purchasing a new construction

Category: Home purchase

Man on construction site with plans in hand

 

In a previous blog post, we discussed some of the different pros and cons of purchasing a fixer-upper home. In this article, we compare some of the same types of advantages and disadvantages, but for the complete opposite: New construction homes. Depending on where you’re purchasing property, you may not have the option of buying a new construction. But with more and more new constructions popping up throughout the country, this could be one of the ideas you’re exploring. Some pros and cons to consider:

Cost

The cost of a new construction will often be higher than buying a home that’s already built and on the market. But if you want something new or you have a specific vision in mind, you have to compare these costs to how much it would cost to remodel an already existing property. Purchasing an older home and fixing up the way you want can save you some money, but it can take a lot of time, so you have to question if the savings is significant enough and worth the hassle, or if you should just settle for a somewhat new home that may not be exactly customized to your liking.

Style selections

One major benefit of buying a new construction is that you can pick what you want before it’s even installed. This means you won’t need to remodel your home because it will already have the look you’re going for. Most builders have a pretty extensive selection, and for many people, they can get exactly what they want. However, if you have a very specific or unique look in mind, you might not get what you want through the builder. For some homebuyers, remodeling an existing home themselves is the only way to get the exact look they envision. 

Limitations

There are limitations to consider when it comes to both new constructions and existing homes, and you’ll want to compare both options when deciding which choice is better for you. This goes beyond style selection, and more so about the type of things that you won’t be able to change, or that would be very difficult or costly to change. This includes things like floor plan layouts, the land your home will be on, and so on. Sometimes you can’t just find what you’re looking for with a new construction and the home you want already exists. Other times it might be impossible to find an existing home that has the features you want, and a new construction is the way to go.

Old vs. new

Some people like the idea of living in a home that was never lived in before. The only way you’ll usually find this is with a new construction. On the other hand, some homebuyers prefer a home that has had an interesting past and many families come and go throughout the years. Clearly this type of history isn’t available with a new construction home, and older homes arguably have more charm and character than newer, modern homes. If you’re indifferent and don’t really care about the idea of a brand new home, you might want to keep your options open to older homes as well.

The process

The process of every individual home sale will vary by the specific property. Generally, you can expect a new construction to take a while. You have to find a builder and community you like, pick out your floor plan, and then begin making your style selections. Once all of that is done, then the home needs to actually be built. This can take anywhere from several months to a year, and many homebuyers don’t have that kind of time. If you do have your heart set on a new construction, you’ll want to plan ahead. If you’re already house hunting and you want something as soon as possible, an older home is usually your best bet. You might be able to find something you like that’s only a couple years old, or even a brand new, quick move-in home from a homebuilder. Unless you are purchasing an older home that needs some work first, has title issues, or is a short sale/foreclosure, you can often close in a timely manner.

Construction

Unless you’re moving into a development that is in its closing stages, you can usually expect to live near a lot of ongoing construction for weeks, months, or even years to come. If you’re gone all day anyway or the noise doesn’t bother you, however, this may not be a deal breaker. But if you don’t want a view of dirt mounds or bulldozers for an extended period of time, you may want to avoid a new construction. Another exception to this could be if you are purchasing your own plot of land and hiring a developer to build your house.

Upkeep and warranty

One huge advantage of a new construction home and the fact that it’s brand new is the upkeep. There usually won’t be anything significant problems with the home since it was just built and hasn’t been lived in yet. Even if something does go wrong, most builders offer a warranty to homebuyers and will take care of any issues—at no cost to the homeowner—up to a certain amount of years. Before you sign on the dotted line, make sure you are working with a builder that offers a warranty and make sure you fully understand the terms and conditions.

Homeowners Association

Most new construction homes are part of neighborhoods and communities, unless as mentioned above, you’re having your home built on land that your purchased separately. As such, you’ll likely pay HOA fees, which could be minimal or substantial. This could be either a pro or a con, depending on how you look at it. It’s an additional cost, but that extra cost might take care of things you don’t want to or would pay for anyway, such as landscaping or an on-site gym. On the other hand, you might want to avoid this extra fee, or you might not like the idea of needing permission from an HOA for certain things (such as renovation projects).

 

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Tags: eco friendly, homeowners association, monthly bills, new construction homes

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