Friday, September 19, 2014

Buying Old vs. New

What do you think of when you picture the home you'd like to live in? To most people it bears a passing resemblance to the one they grew up in. A traditional Victorian or, perhaps, a brownstone townhouse straight out of a familiar TV show. Then again, maybe that is not what you are looking for. Maybe you'd prefer something newer, something with contemporary style, the latest amenities and a lot less maintenance. When it comes to home buying, one size does not fit all. It really helps to understand the differences when it comes to buying an older house and buying new construction.
Just What You Were Thinking
"We wanted to live in one of those cool, funky neighborhoods like in old Brooklyn, New York but we didn't want to have to renovate. It just made more sense to get into a new place." – Donna M.
A New House Built for You?
If not a custom-built house on its own lot, then most new homes today are built in community developments with a cohesive style. These developments can be as small as the old style cul-de-sac neighborhoods, or they can be as big as a former farm filled with dozens and dozens of homes. These homes are built to the latest planning and zoning codes and standards, they tend to be contemporary in style, energy efficient and are often less expensive than resale homes of a similar size. Sometimes, these types of new home developments can represent a savings over established neighborhoods. Either way, the decision about whether to sacrifice an established community is worth thinking about and taking time to weigh your options. Specific details may vary depending on your circumstances, but consider these pros and cons.
Pros and Cons of New Construction
·         Contemporary style
·         Some flexibility on design during construction phase
·         Cheaper to maintain (new appliances = fewer repairs)
·         Cheaper to operate (energy-efficient construction)
·         Extended warranties
·         Cohesive neighborhood (consistent layout, common areas, amenities)
·         Frequently have a homeowners association (helps protect resale value)
·         It's brand-new!
·         Cookie-cutter design
·         Limited negotiating room on price
·         Most likely homeowners association dues
·         Frequently less character, more than likely identical designs
·         Frequently have a homeowners association (can put limits on how you use your property)
Of course, one home buyer's pro ("No one has lived in it before us, so we won't inherit any problems.") can be another's con ("No one has lived in it before us, so we have no way of knowing about any problems."). Fortunately, there are ways to make sure the house you're buying is really the house you want:
·         Check the builder's track record. What else has the company built? Were previous projects completed on time, on budget and without bad blood between the builder and buyers?
·         Walk the streets. If you live nearby and previous stages of the development are occupied, ask the residents if the builder did quality work and lived up to contractual commitments.
·         Picture your home, not the model home. You can certainly have the granite counters, surround-sound home theater and jetted tub you saw in the model home, but they're not included in the base price. You will pay extra for them.
·         Bring your own agent. If the builder has a real estate agent on site, the agent will be more than happy to help you. But, on-site agents work for the builders who hire them. Their best interests will be for the builder, not you.
Finally, consider the intangibles. Similarly styled homes attract like-minded buyers, and most developments are built with families in mind. Depending on your point of view, the consistency, conformity and kids playing in the street can be a blessing or a curse.
Existing /Resale Homes
Just what you were thinking
"We liked the charm factor of an older home -- even if it meant living in a construction zone for months during our renovation." – Jeffery W.
Old = Character?
With new developments popping up almost overnight, it's obvious that new construction is on the rise. And yet, most people buy an older home; i.e., a home that someone else has lived in but is now on the market again. Call them old if you like — existing home sounds better — but they're the kind of houses that many people would like to call home.
Of course, there are pros and cons with older homes, too. (That cute cottage with the casement windows? It can be mighty drafty come winter.) In general, older homes tend to be more available and less expensive than new homes, but they can also be full of surprises.
The Pros and Cons of Older Homes
·         More choices, more styles to choose from
·         Price may be more negotiable
·         Known issues will be revealed in disclosure documents
·         Established neighborhood
·         Could contain more charm and character
·         More maintenance: Things break or wear out
·         Less energy-efficient: More costly to operate
·         Dated design, older appliances and amenities
·         It's been lived in!
As with new construction, there are ways to make buying a resale home less scary:
·         Have the home inspected. You do not want to find out the foundation is cracked or the roof needs to be replaced after you move in.
·         Consider a counter-offer. If the inspection reveals fixable flaws, propose the seller do the repairs or lower the price.
·         Expect the unexpected. Pipes leak, electrical work becomes outdated and furnaces fail — get used to it.
·         Be honest with yourself. If major repairs are required, you'll either have to do them yourself or bring in the professionals. Some people enjoy D.I.Y. or hiring professionals; others don’t.

The bottom line in older homes is this: Don't buy someone else's problems unless you can handle the issues. Find a house you like, consider its pros and cons — objectively, as well as emotionally — and think about the consequences and sacrifices you may have to make. The more logically you approach buying a house, the more you're going to love your home!