If you’re in the market for a new home, you may be asking if there are benefits of buying new construction versus a previously owned home. Both have pros and cons and depending upon your wants and needs, you may choose to purchase one over the other.
Where do you begin if you’re not sure what is right for you? Consider the following three facts as you consider what to purchase.
The process is different depending on the home
Because the Triangle’s housing market is so hot, there can be major disparities in the buying process for existing homes versus new construction. Some of those differences might be enough for you to consider the type of home you want to buy before you get too far into the search process.
The Triangle MLS reported homes in the Raleigh-Durham area stayed on the market for an average of 20 days during the first quarter of 2021. That small timeframe may make it difficult for both renters who are locked into a lease and sellers wanting to make a new move. Contingent offers can be written into a contract to help the moving pieces feel less stressful, but new construction may make the moving process slightly easier.
With new construction, there are a couple of ways you could buy. For starters, if you’re interested in customization, you might want to begin by finding the builder and location that best suits your needs. Then, you can customize the home from the ground up. The Home Builders Association of Raleigh – Wake County website is a resource for finding great builders in the Triangle who can help you build your perfect home. You’ll want to take a couple of important facts into consideration, though. One, you’ll need to have your financing in order before you get started so you have a budget in place before you start planning. And two, you may need to figure out a living situation while your home is being built. The entire process might take longer if you build from scratch.
Another new construction option may be to buy standing inventory. Many builders across the Triangle have new homes that are available and move-in ready. While the ability to customize features isn’t there with standing inventory, you’ll still have the benefit of moving in quickly. Some builders may offer incentives when you purchase, too, such as money toward closing costs, particularly if you use their approved lender. Using a builder’s approved lender may also ease the stress of finding a mortgage, since they are so focused on selling that builder’s homes.
The process for resale homes looks slightly different. Because approval of a mortgage requires that a house meets certain standards, older homes in particular may require more work on the front end on the part of the seller. Once you’ve made an offer and an inspection happens, the seller might need to make some repairs or adjustments before closing is approved. Those repairs will ensure you won’t be met with extensive repairs in the days after you first purchase the home.
Search luxury home listings in the Triangle area from the Jim Allen Group using the interactive Home Watch map.
Maintenance may be more complicated in an older home
Homeowners tend to love the freedom that comes with homeownership: tax benefits, equity savings, appreciation benefits, and the ability to improve the home in any way you choose. It’s usually until something goes wrong—a sump pump goes out, a roof has to be replaced, or the heat quits working—that people become frustrated with owning. There may be significant differences between owning an older home versus new construction from a maintenance standpoint.
When you purchase an older home, you might have to consider any major repairs that need to be made, depending upon the age of the home. Before you buy, be aware of when your home was built in order to be fully prepped for what could happen. For example, if you are buying a historic home from the early days of Durham’s history, you may need to take a close look at the home’s wiring, determine if any structural issues may need to be maintained, or you may even be concerned about chipping from lead paint. A 30-year-old home in North Raleigh, on the other hand, might need such maintenance as a roof replacement or an overhaul to fix outdated designs or renovations. Those determinations should be part of your decision-making process as you look for the right home.
New construction is typically low maintenance within the first several years. The biggest reason is because new homes come with warranties, not just from the builder, but also from manufacturers. That means everything from your appliances to your roof, the foundation and central heating and air will be covered and fixable with low or no expense to you, the homeowner.
You may also be able to request a home warranty when you purchase an existing home, so be sure to ask your lender about protection for major expenses.
Cost differences may be more noticeable in a newer home
One of the biggest differences may be costs, particularly given some of the supply chain issues created by Covid-19. Production slowed in 2020 for everything from locks to windows to wood. At the same time, the pandemic increased demand for home improvement and construction goods, which increased prices—a problem that still hasn’t been fully corrected.
In fact, the National Home Builders Association reported new home prices have increased an average of more than $16,000 due to the spike in lumber prices. While builders are working to ensure costs don’t get too out of hand, it’s likely new homes may be more expensive than buying an existing home, at least in the short term.
You’ll want to remember that those costs could also translate to an older home, however. If you are planning on renovating an older home you purchase, those same costs could end up leading to a higher price tag by the time renovations are complete. If you’re able to buy a fixer-upper, you may be able to get a great deal on the initial costs of the home. But take those renovations into consideration as you look to upgrade your home.
Can you get the best of both worlds?
Keep in mind that it’s always possible to get the benefits of both old and new if you’re in the market for a new home. If you love the look of an older home but want the ease of buying new construction, many builders offer new homes with a traditional design. On the outside, they may look like they’ve been standing for a century, but on the inside, they are open and modern with the latest amenities.
Or, if you’re ready for a home that offers character and a classic appeal, you can always add a touch of modernity by wiring the home for automation or knocking out a wall to create a more open floor plan.
Thinking about buying a home? Check out this list of local professionals with the Jim Allen Group.
The Jim Allen Group is a nationally recognized and award-winning real estate team in Raleigh, North Carolina ranked the #1 Coldwell Banker HPW Sales Team in the nation.