Your Need To Know Guide To Buying A NEW Home
By Kurt Real Estate Nov 23, 2019
We’ve talked about remodels and what to expect when buying an older home. Sometimes, taking on a project might be the way to go. However, projects cost money and can quickly add up. Buying a fixer isn’t for everybody. In the last couple years, cities throughout Orange County have been witnessing a lot of new development so, today, we’re going to weigh the pros and cons of buying a new construction home.
Buying a brand new home can be a great decision for some. When purchasing new construction, you know the houses are up to current building codes, they’re well insulated, nothing needs fixing (and shouldn’t for some time), and original warranties are in place. When it comes to purchasing from a builder, you need to understand there are two different types of builders: custom and speculative.
Custom home builders are hired by an individual who has a vision of a home, they’ve purchased the land, and need someone to work with their architect, electrician, and other home pros to create their dream home. Of course, this comes with a hefty price tag.
On the other end, you have speculative home builders (also known as production builders). They build a number of homes at once and sell them. These homes tend to be cookie-cutter so they may not be your dream home, but they will likely be modern and up-to-code. These developments happen fast and usually contain a few different models for you to choose from.
Pros of owning new construction:
Low maintenance – Considering that everything from the studs to the roof is brand new, there is very little, if any, maintenance associated with a new home. This gives you several years of ease knowing you shouldn’t have to endure any of the unexpectedly large costs of homeownership.
Warranties – Original warranties will be in place on pretty much everything so, if anything were to go wrong, it should be covered under warranty for at least the first year (some are longer). These can be builder warranties where the builder would come fix the problem or they can be home warranties.
Less risk of neighborhood blight – Unless you’re buying an infill home (a new home in an older neighborhood) you don’t run the risk of neighborhood blight. Blight, or the downturn of an area/neighborhood, can happen anywhere but it is much less likely in a brand new community.
A blank canvas – A new home has never been lived in. You can customize the house to your liking and know you are the first to do so. You will take this home on its journey and only you will determine what it may become for you or some other family years down the road.
New construction drawbacks:
Higher monthly costs – In most cases a brand new home is priced where it’s priced. There is not a ton of negotiation happening with new construction and, unlike older homes, you are not dealing with a seller’s emotions. Therefore, where you may be able to negotiate a good deal on an older home with a motivated seller, you will likely have to pay what the builder is asking if you really want the house. If you change any plans to a home under construction or one that hasn’t yet broken ground, you may be asked for a higher escrow deposit in case something happens and you cannot close on the property.
A blank canvas – Though this can be a huge plus for some to make a home their own, others may feel intimidated by this. You can ask your builder about costs, but remember what you’re buying is the standard. This means things like a single bar for hanging clothing in closets, no cabinetry in a garage, etc. The conveniences older homes may have been fitted with by their owners don’t yet exist in a new house.
HOA – Buying in a brand new neighborhood means you are probably subject to an HOA. The amenities can be well worth the extra cost, but it is something to factor in your monthly nut. HOA’s can range anywhere from $200-600+ per month.
Flexibility – Buying a new home is an exercise of patience. A move-in date of March 1 can be pushed to April, May, June…Unforeseen delays are almost inevitable during construction so you have to be flexible if you are purchasing a home that’s not yet been built.
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