When buying a new home, should you go for a pre-owned home, or are you better off with a new construction home? That is one of the questions you want to ask yourself before you start house-hunting. Backed Homes’ owner Lior Abramovich says it is essential to familiarize yourself with all the available options.
Even though it sometimes feels like it is, a resale home is one of many kinds of houses you can buy. Other available options include a spec home and a custom home. To help you make a better choice, here is an explanation of your options when buying a house.
A. Resale home
This type of home has had a previous owner. Although it is not newly constructed, some of its features may be new. That will be the case if the last owner renovated their home or bought new appliances before they sold the house.
B. Spec homes
Spec homes are new homes that have never had an owner. The contractor builds the house before they have a buyer in place. The builder typically chooses a floor plan and amenities they think buyers in the area will appreciate.
C. Custom home
These types of homes are built from scratch by the buyer. The buyer is responsible for finding and buying their land. The buyer also decides the design of the house and supervises its construction from start to finish.
Spec homes and custom homes are two types of new-construction homes. This post will not be about bespoke homes. Building a custom home is an endeavor that requires a lot of time and expertise. Our focus will be on resale homes versus spec homes.
Should you buy a spec home or a resale home?
Buying a new construction home offers more benefits than buying a resale home. Many of the problems buyers have with resale homes are avoided when you buy a new construction home. Here are a few reasons to consider a new construction home.
Benefits of investing in new construction homes
1. New constructions homes are often in a better location
Builders of new construction homes know their best chance of finding buyers for the new houses is to site them in great locations. These locations often have modern amenities; gyms, walking trails, pools, shopping centers, and a welcoming community. They are usually within easy access to places of employment and transportation hubs while offering the advantage of being far from overcrowded city centers. The communities can typically attract several middle-income to upper-middle-income families, making them a great place to raise kids and build great networks.
2. New construction homes have lower maintenance costs
Buying a new construction home helps you save money in two important ways. Since everything in the house is new, you won’t spend more on maintenance. You also don’t need to renovate the home to update its features. That is a very different experience from buying a resale home. With a resale home, you are not sure of the condition of its physical structures. From the onset, the cost of maintaining a resale home is high. Shortly after you buy a resale home, you may need expensive renovations.
3. New construction homes have faster rates of appreciation
You make more money from reselling a new construction home than you can from selling a resale home. That is true even if the original cost of the two houses is the same. The simple reason is a new construction home will appreciate faster than a resale home. As the area where the new home is located sees an influx of residents and the development of schools, businesses, amenities, and commercial activities, the value of homes in that area will skyrocket.
4. The technology in new construction homes is up-to-date
Home construction technologies and building materials are always evolving. Civil authorities constantly update building codes, and owners of older houses must upgrade their homes to make them compliant with these new codes. That is optional when you buy a new construction home. The technology in a new construction home is often years ahead of city building codes. Additionally, the electronics and appliances in the residence are also modern. New construction homes are more energy-efficient, healthier, and designed to be low-maintenance.
5. New construction homes come with a warranty
New construction homes are sold with a builder warranty which covers the workmanship, materials, major systems, and main structures of the building. Usually, you have one-year coverage for workmanship and materials. HVAC, plumbing, and electrical systems have a two-year warranty. The main structures of the building can have up to 10 years of coverage. These warranties mean you have more peace of mind when you invest in a new construction home.
Finally, you get even more benefits – including a discounted sales price – when you buy a presale home before it is built. Talk to us for more information on why and how to buy a new construction home.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.
