What are the Pros and Cons of Purchasing a New Home?
The majority of new homes that are currently under construction are built in subdivisions with a unified style and specific restrictions in place to maintain the property values. Real estate developers chose the location of the subdivision for one very important reason: it is where home buyers want to live. Developers factor in what people in the area can afford, amenities that most people want, and home features that are desirable to their ideal market. In other words, they make the process as easy and enticing as possible for you.
There are other advantages to opting for a newly constructed house:
- During construction, you as the home buyer can add the extras you have always dreamed of having in your home. A garden tub is an expensive modification in existing homes; not possible in some older homes.
- New homes feature the latest styles like an open floor plan and large family rooms for entertaining guests.
- Most new homes have exteriors that are both low-maintenance and visually appealing such as vinyl-wrapped windows, trim, and railings. That means less time spent on routine maintenance. You are free to spend your off hours golfing, traveling, or just enjoying your home with a backyard cookout.
- Architects design new homes to maximize space. Engineers develop construction materials for optimal energy efficiency. Highly efficient HVAC systems, windows, and Energy Star appliances equate to lower utility bills.
- New homes come with a one-year warranty; some builders include warranties for up to 10-years.
Often there are incentives and free upgrades if you use the builder’s recommended lender. But that may not be the best deal for you. A builder can require that you get qualified by their preferred lender, but they cannot mandate that you use that company for your mortgage. They also cannot charge buyers who choose their own lender a higher price. But they can reduce the listed price as an incentive for using their lender.
Some drawbacks that come with new constructions include:
- There is very little room for negotiation. Builders may work with you on some upgrades, but most stay firm on price. Some home buyers in large multi-phase developments, who have attempted to sell their home after a few years, sometimes find themselves competing against the builder for potential buyers. They also may end up selling for less than they originally paid for their home.
- New constructions often lack mature landscaping and may have smaller lots than existing homes. The developer generally maximises available land. The result is limited outdoor space and extremely close neighbors.
- It could take many months or years for the development to build out and new construction to cease. That means heavy equipment stirring up dust, mounds of debris or large bins, and the noise of saws and nail guns year-round.
- You will be limited to possible modifications to your home and what you can have in your yard by tight subdivision restrictions.