NEW HOMES VS. RESALE
Distinguishing between new homes and re-sales is imperative for a home buyer to make an informed decision that best suits their needs.
Both new homes and re-sale homes have advantages and disadvantages. Determining which kind of home will meet your needs best is a very personal and individual decision.
I invite you to carefully consider the report, “10 Tips That Will Save You Time & Money When Buying a New Home”, found below. This essential guide will provide a list of advantages and disadvantages of new homes and re-sales as well as outline 10 tips each homebuyer should know. Exclusive information includes little know buyer advantages the builder of a new home will likely not share with you!
Real estate is a fast paced and continually evolving field. It is my goal to be as knowledgeable as possible, but to also share my information with you.
Read on to learn how you can make the most of your real estate transaction!
10 TIPS THAT WILL SAVE YOU TIME & MONEY WHEN BUYING A NEW HOME
Homebuyer’s Guide to New Homes
Read this report before you start viewing model homes.
When you begin looking at homes for sale, you will learn that many of the homes available on the market are re-sales. However, one fourth of homebuyers purchase a brand new home. Of course, both resale homes and new homes offer numerous advantages. Before you make a decision, ensure that you are well informed and consider these, and other important comparisons:
- Typically provide an innovative use of space and offer modern styling
- Tend to be more energy efficient than older homes
- Can provide you with choices for upgrades or other options
- All aspects are new and contemporary
- Are typically less expensive than new builds
- Are often in established neighbourhoods with established landscaping & mature growth
- Have settled already, thereby preventing the surprise of problems arising from the settling process
Indeed, there are numerous advantageous to both new and resale homes. Typically, potential buyers consider both kinds of properties before making the decision to purchase a home. If you are considering purchasing a brand new home, please consider these 10 points before visiting a model home or considering a new build for your next home purchase.
- Contact Your Agent
Prior to viewing a model home, make an appointment with your agent and research the market. You want to be prepared to ensure that you are viewing model homes that are within your price range. If you already own a property, you must work with your agent to assess how much money you will have to finance your new purchase. Instead of simply estimating, actually calculate each potential selling price to be better informed. If you are a first time buyer, you must begin by confirming the amount of your down payment and calculating your monthly payment schedule. Once again, it is important that you define what a comfortable price range for you is, before looking at homes.
- Buyers’ vs. Sellers’ Agents
Understanding the different priorities of buyer and seller agents is crucial. Remember: the sales agent you will meet at the viewing of a model home represents the builder (the seller), not you, the buyer. Thus, the sales agent is known as a seller’s agent. As a buyer, you will want to work with a buyer’s agent, which will not cost you any money. It is his or her priority to best represent your needs. He or she does this by being knowledgeable about all aspects of new homes, such as warranties, financing, construction, pricing, quality, and lot selection. Enlisting the services of a buyers’ agent will help ensure that you receive the best value for your money.
Similar to other kinds of tradesman, builders can vary in their fields of expertise. Some builders, for example, specialize in craftsmanship while other builders are recognized in their field for their innovative use of space. Some builders are attuned to the needs of their buyers and even offer below market financing or special customer attention during construction of the property and after the sale. To find the builder who will meet your needs, it is important to first understand what your needs are. Once you understand your own needs as a buyer, do research to find the builder who will suit you best.
- Facts about the Builder
It is strongly advised that you research both the financial strength and reputation of the builder. Find “spec sheets” on the features of the home. These spec sheets will address everything, including: energy efficiency, floor plans, delivery of the home, and lot availability.
- Consider the Neighbourhood
It is important to learn about the community. Some considerations to research include, but are not limited to:
- The amenities offered in the neighbourhood
- Potential financial reserves earmarked for building or replacing amenities such as roads or schools
- What plans might be in place for other construction (the local land use officials can help you research this aspect)
- The rules of a homeowners’ association, or potential plans for one to be instituted
- How you might be affected by commuting times and routes
The less expensive the initial price of a home is, the more upgrades and options you can comfortably add without worrying that the home will be overpriced. Options are things the builder installs during the construction of the house and includes items such as the creation of a sunroom or small bathroom. These usable spaces typically increase the resale value of a house the most. Upgrading refers to selecting better quality items as opposed to the “builder standard”. Upgrades can be made to numerous aspects of the home including flooring, ceramics, kitchen fixtures, appliances, and even detailing. It is wise to take advantage of builder incentives that offer upgrades free of charge or as credit off the sale price. However, it is important to remember that some improvements, such as adding a deck, finishing a basement or doing landscaping can easily be done at a later date and often for less money than what your builder might charge.
Buyers often fail to realize that there may be room for negotiating the price, or perhaps upgrades or options. For example, a buyer has some negotiating power if a builder has built a home that has not sold. Sometimes “premium” lots are saved to be sold last and are priced higher. However, bear in mind that all lots typically cost the same for the builder. Enquire about lot pricing and you might find that the builder will offer you a discount or special financing in order to close the sale.
When drafting an agreement with a builder, make sure to protect yourself by having some safeguards written into the agreement. Such safeguards include, but are not limited to:
- Putting the deposit in escrow
- A detailed report of upgrades
- Allowing you to enter the construction site to keep tabs on progress made
- A 30 day notice in advance of the closing date
- An explanation of the fine print in the manufacturer and builder warranties
As mentioned, some builders, particularly those in high volume areas, can provide you with a special financing offer. Keep in mind that “home loan” lending is very competitive and you have a number of different financing options. Be sure to do your research and compare rates and lender fees. Importantly, appraisals, home inspections, attorneys, closing fees, and surveys can vary in price as well.
Though a home may be brand new and constructed using only modern materials that are typically more durable, quiet, safe, and have less maintenance and are stronger than older materials, it is advised that you still enlist the services of a licensed and reputable home inspector. Afterwards, devise a builder “punch-list” from what you have learned in order to address any problems or defects prior to closing. You might want to budget for items that you wish to be modified or added at a later date. A real estate agent can help you negotiate the best price and best terms with the builder.
Buyer Advantage Your Builder Might be Keeping Secret!
Some builders already have completed newly constructed homes that could be ready to move into in as little as a month. Although a builder always wants to sell, some keep this information private.
Immediate Delivery on Homes can be Available for a Multitude of Reasons
- The community in which the new homes are being built is almost finished so the builder continues to have on-site-contractors construct homes for sale that are built on speculation
- The model home is now for sale
- A contract for one of the homes has been discontinued
- Builders intentionally have homes for immediate delivery to suit the needs of buyers who are relocating or have already sold their previous house and want to move immediately
It is a good idea to enquire about immediate delivery homes because sometimes those homes come with special financing programs or free options. These incentives might be in lieu of slashing prices to appeal to buyers who will be purchasing later on. An immediate delivery home is an excellent option if you must move in quickly or want to view the exact space you will be purchasing.
Please feel free to contact me with any questions about purchasing a home, whether it is a new home or a resale. Together we can determine what kind of home is best for you.