Buying a home, new or resale is an important decision and there are pros and cons to choosing either one of these paths. I have personally purchased both and this week I will review the high level of the behind the scenes for both. Remember, when you are ready to purchase a home, you will consider your personal values and desires and allow these to guide your decision.
According to Lending Tree, “Many buyers wonder whether it is cheaper to build or buy a house. Some buyers assume that a newly-built home is more expensive than an existing home, but the gap between the median sales price of new and existing homes narrowed in recent years. The national median sales price for an existing home in July 2021 was $359,900, according to the National Association of Realtors, while the median sales price of a new home that same month was $390,500, according to the Census Bureau.”
Below is a simple comparison of other factors to consider when thinking about new construction vs. a resale home.
New Home Financing
Interest rate is not locked in until 45-60 days until closing.
Most builders offer incentives to use their preferred lender. These incentives could cover closing costs. Another incentive I have seen is allowing buyers to pay the deposit in smaller amounts over time. I still recommend looking into other lenders as well as the one recommended by the builder. Shop around to find the best lending option for your specific situation,
Earnest Money is a deposit and each builder requires a different amount. One builder may require 10,000-30,000 but depending on the market this could be negotiable.
Deposit is paid at the sign of the contract.
New Home Timing
In 2021 the average new build took 10-12 months from start to finish
You can expect delays with the completion. This has been especially evident in the 2020-2022 housing market due to Covid-19
Closing will be confirmed 30 days before the build is complete.
New Home Pricing and Contracts
Less room for negotiation (depends on the builder and the market). This is why you should bringing a real estate agent can help navigate negotiation
Pricing is released in stages, as home lots are released
Contracts are provided by the builder (make sure to review with your agent BEFORE signing)
Resale Home Pricing and Contracts
The listed price is typically public information and you can negotiate
Also dependent on the market
State provided contracts typically utilized if working with a Realtor
New Home Communities
Up to date communities with modern layouts and finishes
New amenities for community use, this may also mean homeowner association fees
All people are new to the community
People who move in with first releases, may get the lowest pricing however they are then surrounded by ongoing construction for as long as the community is being built
New schools often come when large master planned communities are built
With developed communities you can research the details of the area
It is clear how people are caring for the area and homes
Established neighborhoods which include more developed trees
There is a lot to consider and it really depends on your preference! Set up a consultation with me, if you are looking to buy or sell a property in the metro Atlanta area.