Strategic Points Group: Buying Homes: Older homes vs. new homes: Which is a better buy?

Strategic Points Group Massachusetts and Rhode Island Real Estate

Strategic Points Group Massachusetts and Rhode Island Real Estate Home

Strategic Points Group Massachusetts and Rhode Island Real Estate About Us

Strategic Points Group Massachusetts and Rhode Island Real Estate Careers

Strategic Points Group Massachusetts and Rhode Island Real Estate Contact Us

Phone: 508-636-2800 - Fax: 866-838-6190

You're in the market for a home. Maybe a new one, maybe a resale. Which one should you buy?

The question is a serious one for today's homebuyers because interest rates are low, new residential construction is high, and demand for homeownership is strong.

So which is better? A new home, or one that's been broken in by previous owners?

The answer depends on preferences. If you talk to homebuilders, you'll many reasons for a new home. And obviously, real estate agents who work with existing homes only will give you a different line of reasoning.

And the fact is that both viewpoints are right. Both new and existing homes have their pluses and minuses. The job for a prospective home buyer is to determine individual preferences and shop accordingly.

New homes
Let's look at some advantages and disadvantages of buying a new home. They cost more, but "you get what you pay for. Typically, you'll find that a new home will be more expensive than a 15-year-old house.

20 years ago, an average new home had about 1,200 square feet. Today, it's more like 1,900 square feet. And in 1977, the average new home had one and a half bathrooms; today, it's closer to three. You can typically get a lot more amenities on new homes due to the advancement in needs and technology.

Most new homes today are being wired for the technology age, and have lower utility bills. What this means is that today's new home are likely to be wired for multiple telephone lines, computers and other options that simply weren't available 20 years ago.

The fact is that today you have more amenities. You can pick and choose almost all of the features you want in a new home. The more you spend, the more customizing you'll receive.

And new homes typically cost more. One reason is constantly escalating land values nad lumber costs. Another is labor costs, which are more difficult to control, and vary from market to market according to fluctuating hourly wage standards.

If money's tight, and costs rather than convenience are a primary consideration, then perhaps you should look at an existing home. Here, too, there are trade-offs, just as there are with all new homes.

Older homes
An existing home can be more of a bargain than a new residence, for several reasons.

First, existing homes usually already have decor-matching appliances in place, so a buyer doesn't have to shop for refrigerators, ranges, microwaves, freezers, and other extras that can represent a hefty capital investment when buying a new home. Many times updates have already been done, so the home has the look of a newer home. An existing home comes with "mature landscaping" already installed, which will require less maintenance than nurturing new landscaping in a new residence.

Most important, the purchase price tends to be less than for new homes. With existing homes you pay past prices for labor and materials, not current prices. And that can add substantially to the cost.

Existing homes usually are in established neighborhoods. The character of an older neighborhood is different from that of a new development," he muses. "In a new one, you don't know who your neighbors are. But in an older neighborhood, you can go to the neighbors, knock on the door, and ask about schools, how many children are on the block, police and fire protection -- the important things. You can learn about your neighbors are before you move in.

And finally, existing homes offer more room for negotiation. With a new home, there's a "psychological value" in warrants that can cover construction and appliances for terms ranging from one to 10 years. A builder has to get a certain amount of the house. With an existing home, you can usually negotiate price more readily.

While looking at homes, you will see a direct relationship between the care, maintenance, and pride of the neighborhood in general and the price of the homes that are for sale. Another advantage is that you know about schools, shopping centers and amenities because an older neighborhood is already "built out." In new construction, you could be unpleasantly surprised that undeveloped land near your home has just been sold and planned for a pig farm.

Since interest rates are low, It's an excellent time to buy. What you buy is an individual choice. You almost can't go wrong either way, and you'll find that you get what you pay for.

Try these other related FAQ sections:


			New Mortgage

			Refinance

			Home Equity

			Debt Consolidation

			Construction

Strategic Points Group Massachusetts and Rhode Island Real Estate Free MLS Search

FREE
Massachusetts and
Rhode Island
MLS Search

Information and interactive calculators are made available to you as self-help tools for your independent use. We can not and do not guarantee their accuracy or their applicability to your circumstances. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.

Privacy Terms Disclaimer Fair Housing Site Map	© Strategic Points Group - All rights reserved. Last Updated: