A new construction home is a property that is under construction or recently completed, and it’s waiting for its very first owner. If you purchase a new construction property, you’ll be the first person to live there, and that comes with some pros and cons.
An existing home is a home that the previous owner is listing on the market for sale. Depending on the home’s age, there could be just one or many owners prior to you—which also has plusses and minuses.
To help you decide whether you should buy a new construction property or a previously-owned home, we’ve put them head-to-head in a variety of categories. Check it out:
Let’s start with the big one. When you’re searching for a new home, one of your main concerns will be your budget. Almost always, new construction properties are more expensive than previously owned homes, especially if you’re going with a custom build.
In part, you can attribute the lower price of existing homes to negotiating power. A home seller is more likely to make you a deal than a custom home builder. The cost of building materials is also high right now, and remember that with a new construction home, you’re paying to get brand-new everything—from the foundation to the finishes. You’re also getting the latest in architecture, design, energy efficiency, and home automation tech, and you’re also covered for repairs by warranties.
What’s the real price difference between a new construction property and an existing home? Last year, average prices for new construction homes ran
32% higher than previously owned properties.
Maintenance, repair, and safety
A major reason for a new construction home’s high price is that it’s brand new and under warranty. In terms of maintenance, repair, and safety, that makes it the winner over a previously owned home. When you buy a new construction house, it’s safe to assume that it won’t need major repairs for quite some time—and if it does, your warranty will usually cover the cost.
New construction properties are low maintenance and when you move in, they’re the cleanest they’ll ever be. You can rest assured that the building materials and methods are safe and up to code, which is not necessarily the case when you purchase an older, previously owned property.
Once you’ve filled out your mortgage application, it takes on average a month to 45 days to close on an existing home. This process can move even faster if you’re already preapproved with the lender if you have all your documentation in order, and if the seller is also organized and reliable. Some buyers close in as little as two weeks—though that ultra-short timeline is more typical of all-cash sales.
Why does closing on a new construction home take longer? It depends on the home. Usually, the longer timeline applies to a home that isn’t built or isn’t quite finished yet. You’ll have to wait for the construction process to finish and then have all the standard inspections performed before moving forward with your purchase. The upside of a new construction home’s longer timeline is that you can customize the property at this point, choosing your preferred flooring, paint, light fixtures, appliances, finishes, and more.
New construction homes are designed with modern aesthetics, including the newest in interior design trends—but they can feel cookie-cutter to some buyers who feel like they’re seeing the same thing over and over again.
Older homes feature the unique architecture of their era and one-of-a-kind aesthetics, including uncommon designs and rare finishes. The cons? Some existing homes may have outdated looks that you’ll want to update when you move in.
Which is better? It’s a tie—you’ll have to tell us which one you prefer.
New construction homes are made with the latest energy-efficient materials, including insulation, windows, heating and cooling systems, and appliances. Will you get the same in a previously owned home? It’s hit or miss. Many homeowners have made energy-efficient upgrades in recent years to reduce their carbon footprints and save on energy costs—but they’re rarely comprehensive. The exception is if you purchase an existing energy-efficient home built in the last five years or so. Though the technology in a brand new construction home may be more advanced, you can find completely green options if you shop recently-built existing homes.
If mature landscaping is high on your must-have list, an existing home is more likely to fit the bill than a new construction property. Unless you have a wooded lot, new construction homes typically come with baby trees and young landscaping—while the landscaping around existing homes has had more time to grow and mature.
Unless they’re already complete, new construction homes can usually be customized to your specifications. That means your home will be made especially for you, the way you envision it. Doing the same with an existing home requires costly and time-consuming renovations depending on the magnitude of the changes you want to make.
The downside of customizability is decision fatigue. Some buyers prefer a turnkey home to one where they have to make choice after choice until the home is complete. If this is you, look for a new construction property that is nearing completion already so the decisions you have to make are limited.
Buying an existing home from its previous owner has as many pros and cons as buying a brand-new construction property. So how do you decide? Prioritize which aspects are most important to you, and see which one matches up.
Then, get in touch. Our expert team can’t wait to get you into your dream home.
