Personal preferences aside, there are pros and cons to buying a newly built home over a resale, as well as financial implications for each option.
Rochelle Fitzgerald, a sales associate with Coldwell Banker Residential Brokerage’s Rockwall office near Dallas, says, “There’s no question that some people prefer that ‘new-home smell’ and the idea that no one else’s feet have been on the carpet. On top of that, many people like to personalize their home by picking out everything from the beginning.”
Some buyers focus on the more practical aspect of buying a new home because it typically will require less maintenance than an older house.
“It’s very important to some buyers to have everything new, plus they have the peace of mind that comes along with the builder’s warranty,” says Dan Kruse, broker/owner of Century 21 Affiliated in Madison, Wis.On the financial side, builders, particularly in a slow real-estate market, offer plenty of incentives to buyers.
On the financial side, builders, particularly in a slow real-estate market, offer plenty of incentives to buyers.
“In a sellers market, new homebuyers will often spend as much as 10% or more above the purchase price for optional features,” says Jeff Ristine, broker/owner of Weichert, Realtors: Kingsland Properties near Chicago. “Now many builders are offering free options as an incentive to buyers, such as a finished basement and an upgraded kitchen. Builders are tailoring their incentives to specific buyers, so some will throw in things like initiation fees for a country-club membership.”
When buying a new home it is critically important that you’re aware of all costs involved in your home loan, or it’s going to cost you. Closing costs are the miscellaneous fees charged by those involved with a home sale. You can expect to pay anywhere from 2 to 4 percent of the total sale price in closing costs, depending on your unique situation. Mortgage loan closing costs can be excessive, but if you’re prudent, you can save thousands when it comes to finalizing your loan.
Unfortunately, many new homebuyers just accept the exorbitant list of closing costs fees as an inevitability of the process. The experience can be a bewildering one for these individuals. They don’t want to risk their American dream on a few unsubstantiated costs. But, it doesn’t have to be this way, understanding the process can help you save. Most home builders have preferred lenders which give the buyer incentives to use their lender. This may not be in the best interest of the buyer because those incentives are built into the price of the home and passed onto the buyer.