Is It Better to Buy a New Construction Home?
In today’s real estate market, it’s hard out there for home buyers. The U.S. is facing an ongoing housing shortage, and inventories of existing homes are extremely low in many areas across the country. To close this gap, home builders are building new houses, but it’s going to take some time before inventory evens out.
Overall, there’s nearly twice the demand and two-thirds of the resale home supply compared to recent years. This can make it increasingly difficult for homebuyers looking for their dream home, or any home for that matter. As homeowners who bought their primary residences with 3% interest rates refuse to move, people are looking to newly constructed homes as a solution.
While new homes may cost more initially, the difference is worth it when you figure in condition and less maintenance compared to resale homes. Newly built homes offer many advantages, from energy-saving systems to modern floor plans to fit today’s lifestyles. Keep reading to take a closer look at the benefits of buying a new construction home.
Is It Better to Buy a New Construction Home? Let’s Check Out Some Benefits.
Buying a brand-new home is often associated with high costs, long waiting times, and a lot of stress. But Marketplace Homes streamlines the process by finding a solution for your first home, eliminating the need to move twice, and planning your move-in timeline as precisely as possible. Here are some more benefits to buying a new construction home vs. an older home.
1. You Can Customize Its Exterior and Interior.
Nobody knows your wants and needs better than you do, and having so much control over the details that fit your home to your taste and lifestyle is quite a luxury. Buying new construction means that you get to pick out everything from the color of your siding and trim to the placement of every single light bulb and outlet.
Many of the things that you get to customize are difficult, or very expensive, to put in after a home is constructed. Examples include a deep pour basement or extra windows. If you’re someone who loves design or just someone with a lot of preferences about what makes a perfect space, you’ll really enjoy getting to make so many decisions about the different aspects that make your house a home.
- Marketplace Homes Expert Tip: Many builders may only have a few custom home options regarding paint choices, carpet colors, and countertops. In some cases, you may also be able to purchase different appliances and have them installed while your home is being constructed.
2. New Homes Are More Energy-Efficient
Across the board, new home constructions are specifically built to use less energy by taking advantage of innovations in energy efficiency. Examples of items that can be optimized for energy efficiency include building material choices, heating and cooling, appliances, and air sealing.
While your builder likely includes some of these options as standard, such as energy efficient windows, make sure to ask about other energy saver options as well. Dual flush toilets, smart thermostats, and LED lighting are small but incredible tools to help you reduce your home’s carbon footprint.
- Marketplace Homes Expert Tip: A new home today is 30% more energy efficient than a home built just five to seven years ago. Think of what you could do with that significant cost savings!
3. There Are Lower Maintenance Costs
Think about the cost of repairing a used car vs. a new one. The same goes with homes. While new homes aren’t immune to needing repairs, the chances of having to fix a leaky roof or a broken pipe are significantly lower. This means less stress and less money spent on renovations and upgrades while everything is still new.
In addition, most new home companies include a range of builder warranties with their homes, which may include a short-term full structure warranty and a longer-term exterior warranty. It’s a big financial benefit, and a nice relief in the years following such a major purchase.
Should your home inspector identify any problems throughout the process, builders will fix them before you buy the home at closing. You will not have to deal with the dust and noise from repairs after you move it or the inconvenience of having to stay home from work while workers are in your house.
- Marketplace Homes Expert Tip: New homes cost less per square foot than older houses. This maximizes your investment while saving you time and money over the life of the home.
4. You Enjoy Initial Cost Savings
Closing costs on a new build typically range between 2 to 4 percent of the final sales price. However, many builders offer builder incentives that may include credits to help buyers pay closing costs when they use a preferred lender. These closing cost credits can be substantial — as much as 3% of the purchase price, saving you thousands of dollars at the closing table.
Another significant savings comes in the form of lower title fees. Because most builders do so many transactions with their title company of choice, new home buyers who use that same company can expect to see title and escrow fees much lower than resale homes. All these just make new build homeownership more rewarding!
- Marketplace Homes Expert Tip: See if your builder and title company allow for a remote closing. With a mobile closing, a notary will come to you! This allows you to complete the transaction in the comfort and privacy of your own home, or the location of your choosing. While this cost is typically around $100, many titles companies will waive this fee if you ask.
5. You Will Enjoy Chic Modern Home Designs
Buying a new home means that you can choose the floor plan meets your needs now, rather than worrying about a stressful & expensive remodel later. Today’s homebuyers prefer an open floor plan, most often without a formal living space.
Newly built homes tend to be nearly 1,000 square feet bigger than the average resale home, and even the most basic new home usually comes standard with an owner’s ensuite bath. Multi-generational homes are becoming increasingly popular as well, and flex rooms are extremely common. These customizable areas are ready for transformation into movie lounges, office space, playrooms, and more.
Designing a new home to suit your taste makes it so that you’re likely to stay there longer. it comes with the right paint colors, flooring, appliances, square footage, and floor plan. This makes it less necessary to move again, saving you money in the long run.
- Marketplace Homes Expert Tip: If you prefer a more traditional floor plan with formal living & dining spaces, many builders still offer at least one floor plan to suit your needs. You’ll get all of the benefits of new materials & construction, with the layout that works for you.
6. Many Builders Offer Competitive Warranties
New single-family homes often come with the builder’s guarantee for essential systems like the home’s structure. As new homes do settle during the first few years after breaking ground, builders will offer new construction home warranties. These are not to be confused with the kind of home warranties people get for their appliances and plumbing system through companies like American Home Shield, but guarantee specific parts of the home if they fail prematurely.
Having such risks covered gives buyers substantial peace of mind. To ensure there is a warranty, as your real estate agent to confirm these details before you sign any documentation to proceed with a new construction home.
- Marketplace Homes Expert Tip: Did you know that even new builds get home inspections? Yes, even these homes go through the due diligence period to offer you the best peace of mind.
7. There’s So Much Less Competition
There’s nothing worse than putting an offer in on the home of your dreams only to lose it to another buyer. Today’s resale market is not only tough, but there also slim pickings. So, even a home that is only average can still get a lot of attention. Good for the home seller, but not great for anyone looking for a solid home purchase.
Since the buyer of a new construction home is contracted to buy the future build, it’s incredibly rare to get into a bidding war in this scenario. When working with your builder, you won’t need to compete with anyone else for your home. This allows you to focus on the new construction process and saves you an incredible amount of stress.
- Marketplace Homes Expert Tip: Look for close-out opportunities in communities with only a few lots left. Typically, builders are able to offer more incentives to these buyers as they close out new home sales in the community. Many of the best incentives come from the construction loan with the builder’s preferred lender, so ask about the benefits you can get!
8. Community Camaraderie: You’ll Be One of the Original Neighbors!
One of the built-in benefits of buying a new home is the community itself! When families move into a subdivision around the same time, nobody is the “new kid on the block”, and many builders host block parties in newer developments to help owners meet.
Another benefit to new communities is that they typically come with amazing amenities that older ones do not. From resort-style swimming pools and tennis courts, to walking trails and clubhouses, there’s plenty of opportunity to meet your new neighbors and forge lasting friendships.
- Marketplace Homes Expert Tip: Many newer communities have their own groups on Facebook. While you’re in the home search process, it’s a great idea to join these groups and ask the current residents any questions you may have about the community and how they like living there. It’s an incredible resource to get feedback directly from those already living there, and you’ll likely come away with knowledge you wouldn’t be able to get from the builder.
Before You Buy, Remember: Location, Location, Location!
Location is one of the most important factors homebuyers consider when choosing to buy in a new development. Newer neighborhoods typically get built close to local amenities, providing homebuyers with plenty of options to explore. This also means that as development continues to happen around your new home, it can grow in value. If you decide to sell in the future, the median sales prices of the homes in your neighborhood can be higher than what you bought the home for.
- Marketplace Homes Expert Tip: Location is the one thing about your home that you will never be able to change. It’s better to have the worst home in the best neighborhood, than the best home in the worst neighborhood.
Is it Better to Buy a New Construction Home?
While navigating the real estate world in this market may look a little bit different than normal, home buyers have an incredible opportunity to take advantage of builder incentives and other perks. If you also own a home bought with lower mortgage rates, you can also turn it into a rental or use its equity toward a new build.
Ultimately, the decision to buy a new construction over an existing home is a personal one. If you take the time to think clearly about what you want in a home, both now and in the future, you’ll be able to set yourself up for success.
