What is the difference between buying a New Construction Home and an Existing one?

May 21, 2009

My husband and I are first time home buyers and we would like to know the difference in buying a New Construction Home vs. an Existing Home.

Share It!: These icons link to social bookmarking sites where readers can share and discover new web pages.

Written by lab · Filed Under Construction

Comments

4 Responses to “What is the difference between buying a New Construction Home and an Existing one?”

Insurance Biz CT on May 22nd, 2009 10:20 pm

I think there is much more flexibility in the price of an existing home. You don’t know what the motivation is of the people selling their existing home. A builder’s motivation is to make money, and they value their workmanship.

If looking for an existing home, set a criteria first, the take that to a realtor and ask them to show you listings of homes that fit. Some criteria can be:

Location/school system
Age - don’t buy something old unless you know you will have more renovation and repair than a newer house. I would recommend post-1979. (no lead or asbestos)
Size
Amenities (garage, pool, # bedrooms, # bathrooms)
Price - they will always go a little above your range because you may be able to negotiate the price down. The longer it’s on the market, the better your chances you have to negotiate.

Don’t be emotional when it comes to looking at houses. It is an investment. Look at it that way. Of course, it has to meet your needs, but don’t “fall in love” with the decor. It can be easily changed.

Good Luck.
Jim B on May 23rd, 2009 4:27 am

The differences are considerable:
New construction will have all of the latest styles & trends;
existing homes (depending upon their age) may be outdated.
New construction builders often will offer to pay the closing costs if you get a loan from a certain list of preferred lenders; existing home sellers may be willing to hold the financing themselves saving lots of closing costs, paperwork, and time.
New construction homes usually have a warranty; some existing home sellers (but not all) will also purchase a home warranty.
New homes are often on much smaller lots and have smaller rooms; existing homes were often built when there was more land and so the lots were larger, as were the rooms.
New homes usually cost more per square foot than existing; that means you may get a larger older home for the same money as a smaller newer one.
I would recommend going to open houses on Sunday in the area in which you would like to live in order to get a free idea of what is available and what the differences are. If there are new homes being built you can also go to the builder’s agent and ask to see one that is finished (or nearly so) but not yet occupied.
One last note: New homes are often built using cheaper mass produced materials than existing ones, but you also need to look carefully at the existing home for signs of wear and tear, unless you’re husband is handy with a hammer and saw.
Ok, one really last note: Resale value; most new homebuyers want a new home (they spent most of their lives in an old one), so newer homes resell faster in most areas than older ones.
Kevin H on May 24th, 2009 9:41 am

Your question is Veg ? It like buying a new car or used. First new is not always better. It depends on the house mainly the builder. A lot of older homes have better workmanship. If you buy one all fixed up, you might be better off. Here in Michigan things aren’t selling and builder need to get reid of them so are willing to bargain more then some home owner. Especially the ones who took out all the equity and have no room to bargain. Best bet is sit down with a Realtor and interview them. Be honest tell them up from you want to check out a couple of them and go with the one you feel comfortable with. I am a Realtor here in Roseville, MI.
swimmyfishy on May 25th, 2009 1:19 pm

It depends on part of country you are in here in the south east existing houses for the most part are going for 130 square feet and new ones 100 to build one its 130 and up.. but you dont have the established neighborhoods and the houses on new are all packed in. Its nothing to update a house kitchen ect the way you want . look around when you find a house you will know its the one.