If you are like most buyers out there, you are wavering back and forth on whether or not to purchase a brand new home or go with an existing home. There are pros and cons to both, so here is a head to head comparison to help you choose which type of home suits your priorities better.
Sales Price– Draw
With all else being equal between the two, a new home usually has 10-20% premiums over existing homes, but with most of the best new home locations taken right off the bat, the newer homes end up costing a little less because they are usually more remote and have smaller yards. It is hard to compare equally size wise between the two because of this. Most of the time it boils down to the location and size of the yard. Keep in mind when comparing the two to go by lot size and layout, not how the size looks as existing homes are often overflowing with the owners possessions and builders specifically place smaller furniture to make a new home appear larger.
Transaction Speed– Existing Homes
Typically new homes are sold from models before construction even begins. This is great for allowing customization and personal touches, but it will take typically 6-9 months before the home is completed. It can get tricky if you want to list your current home as listing too soon and you could end up without a home for a while and listing too late you could end up with two mortgages, so be sure to check with an agent to see how fast homes in your area are selling.
Cost of Ownership– New Homes
New homes are 30-40% more energy efficient on the average. Lower utility bills, better insulation and tighter sealing give new homes the advantage; whereas, with an existing home you may end up replacing the roof or heat pump within 10 years, costing an average of $18,000 for the roof and $3,000 for a new heating unit.
Near Term Gains– Existing Home
With the exception of sweat equity, new homes give very little room for improvement, causing them to stay roughly the same price as the surrounding homes. An existing home if improved upon can end up giving you a higher return.
