The Differences Between New Construction and Established Homes
When choosing a home, one of the major life decisions you need to make is to choose between a newly built home or an existing one. And we know that there are lots of variables you need to look at before making any final decisions. But don’t worry because we will share with you the things that you need to know to help you decide what type of houses you should buy.
1. Cost Considerations
Cost is one of the major concerns that all home buyers have in common. And honestly speaking, there is a sizable gap between the price of a newly built home and resale property.
For newly built homes, there is an average cost of roughly $300,000 not including acreage. And that is assuming you are sticking with the basic model and not opting for any expensive upgrades.
On the other hand, according to the latest US census, the average sale price of an existing home is approximately $278,000. And there is roughly $60,000 less cost than that of new construction.
Aside from this, you can add up to significant savings over the life of your home loan depending on the terms of your mortgage. And, there is a greater opportunity for negotiations when purchasing an existing property. So, if you want to save money in buying your own house, an existing home might be the better option.
2. Repairs, Renovations, Upgrades
For a newly built house, you have better upgrade opportunities than that of a resale property. That is because new homes are unlikely to need any significant repairs for a number of years. So, you can focus all of your energy on beautifying your home and doing all of your desired upgrades.
On the other hand, an existing home might need some repairs and renovations before you can think of upgrading. That is why most experts agree that you should have the property inspected beforehand. This is for you to know the cost of future repairs and renovations and consider them in the total cost of purchase that you need to prepare. That being said, older homes often have a unique architectural charm that you rarely find in newly built houses, and that can sometimes offset the cost of any future repairs or renovations.
3. Property Tax and Insurance
For the property taxes, older homes are typically less expensive because they fall into a different tax base than new homes. In most cases, that means that an older home will come with a lower tax burden for the owner.
But when we talk about insurance, a newly built home is somehow less expensive than an older property. This is because the building is new and up to current standards while an older home’s insurance depends on the location and condition of the property. So, depending on the location and condition of your desired home, the insurance cost might have an impact on the total cost of purchase.