Sunday, July 21, 2024 / by Teresa Pileggi
Is A New Construction Home Right for You?
Is A New Construction Home Right for You?
Homeownership comes with numerous decisions. From choosing the best neighborhood and home design to estimating the cost of moving to a new state or city. However, one area that sees less discussion is whether you should go for a new construction or an existing home. While both options depend on your budget and home preferences, they have distinct benefits and drawbacks you should know.
As the real estate inventory and home affordability continue to decline, many homebuyers are now looking for an alternative way to own homes. This includes buying newly-built homes with less competition. So, do you also think a new construction home is the right choice? Before deciding, discover why a new construction may or may not be right for you.
Why A New Construction Home Is Right for You
A new home comes with many benefits that appeal to most new homeowners. These include.
1. A New Home Rarely Needs Repairs
The joy of buying a new construction is that you will be the first person to live on the property. The home comes with brand-new and updated appliances and less to no defects such as scratches, dents, and wall stains. That means the home will not require any repairs and renovations that come with pre-owned homes.
2. More Room for Customization
When buying a pre-owned home, you will need to make significant updates and renovations for the home to match your expectations. However, with new constructions, you can decide what aspects to be added to the property along the construction journey. This includes choosing everything from color palettes, safety features, room sizes, and other fixtures.
3. New Construction Homes Have Low Maintenance Costs
Since a new construction home has everything new and up-to-date, it means you will need to spend less money maintaining it, at least for the first few years. As the first occupant, you can easily control every item within the home to keep it working for a long time without replacing or repairing it. Moreover, most new construction homes have the latest energy-efficient systems, saving you money you spend on energy.
4. Most New Construction Homes Have Warranties
Buying a new construction home does not mean that everything will remain working properly for many years to come. There are higher chances that some items will break down, which require immediate attention. Fortunately, most new construction homes come with warranties that require builders to cover the costs of repairing or replacing broken items within the warranty period.
5. You Can Benefit from Buyer Incentives When Financing a New Construction Home
Financing a new construction home is the same as financing a pre-owned property. That means you can shop around for an affordable mortgage option. However, most homebuilders would prefer you work with their in-house lenders to benefit from their buyer incentives. These include low mortgage rates and extended rate locks.
Why A New Construction Home May Not Be Right for You
Like any other real estate investment, a new construction home also has its set of drawbacks that you should be aware of. Some reasons why a newly-built home may not be right for you include:
1. A New Construction Is Costlier
All the benefits of a newly built home have a higher price tag on them. That is primarily due to the latest material used, builder scarcity, and an increase in overall home values. The skyrocketing market value of new construction homes may also result in higher property taxes. Moreover, while customizing your home may be appealing, you should know that customizations can lead to hidden or future costs not included in the purchase price.
2. New Construction Homes Take Time to Move In
On average, it takes between 7 and 9 months to build a home in Canada. However, the period may be longer or shorter depending on the type and size of home you want, as well as the customizations you deem fit. The longer time frame may also be due to supply chain issues and frequent changes in home design. Therefore, if you have limited time to move into your new home, a new construction may not be ideal for you.
The good news is that most communities have some quick move-in or special homes for those buying new constructions within them. However, since such special homes are not guaranteed or may not fit your items, it is recommended that you only go for new constructions if you can accommodate some delays.
3. It Takes Time for The Landscaping and Neighborhood to Take Shape
With most new construction homes, landscaping always comes last after all the interior work is done. That means it will take a few more years for the trees, grass, and perennials to grow. Also, unless the builder includes the fence in their plan, you may need to construct the fence, install the gate, and design the pathways yourself.
Another drawback of buying a new construction home in a developing community is that there will be massive construction projects going on around. These may lead to an unsettled community with more noise and uncontrolled movements.
4. Overwhelming Decision-Making Process
Buying a new construction home comes with a tedious decision-making process, from choosing the right design to financing your home. Unlike an existing home where you only have to decide based on an already established property, you may be paralyzed by the available options to build a home that ticks all your boxes. This can slow down the whole process, besides making it expensive.
The Bottom Line
Choosing between a newly built home and a pre-owned home is a task that most homebuyers face during their homeownership process. Although both houses provide a guaranteed asset to store wealth, the final decision depends solely on the buyer’s willingness to spend more money to acquire a property that fits their preferences. Therefore, regardless of the route you take, it is wise to weigh all the benefits and drawbacks that come with both options and make a sound decision.