New Construction Vs. Existing Homes
September 1, 2021
When selling your home, you have a few different options in where you’ll go next. One big decision to make is what kind of house you want to live in. Of course you have your list of wants vs. needs
and know the general location of your next home, but will you be buying an existing home or investing in new construction.
Both home options come with their own list of pros and cons. Either decision you make should be made with your specific situation in mind and a trusted team of housing professionals to help guide you through the entire process of selling your current home and buying a new one.
New Construction
When we are talking about new construction, in this case, we are talking about custom building your next home. From the floor plan and square footage to the metal finishes of your hardware, new construction allows you to choose exactly what you want your home to look like. As a home seller, you may have lived in your current home for many years and made sacrifices on your wants vs. needs list. New construction homes give you the opportunity to turn your dream home into a reality.
Pros
- Customization:
It’s all up to you. When investing in your custom build, you get a say in everything from where the kitchen goes to what kind of stain you’ll be using on your wood floors and the exact doorknob on your front door. This truly allows you to create your picture-perfect home.
- Efficiency: New construction means brand new everything. Newer appliances and home technologies such as HVAC systems, windows, dishwashers, and more are much more energy-efficient than older models in existing homes. This build-up of energy-efficient technologies in your home can mean extra savings on your utility bills!
- Maintenance: Because everything about your new construction home is brand new, you won’t have to stress about any surprise maintenance. This initial savings on repairs to your home can help you better predict your monthly home expenses and save up for a home-specific emergency fund should you have any hiccups in the future.
Cons
- Location: Typically, new construction is built in what is called exurbia, or a location removed from the nearest suburban or city areas. While you may get to build the home of your dreams, you may also be sacrificing easy access to things such as shopping, dining, and other activities. It's also important to consider the potential of adding on time to your commute.
- Price: Especially in today’s market, building a new construction home can quickly add up in price. Considering things like the price of lumber and other materials, the price of shipping those materials, and paying for the physical labor that will go into building your home, expenses add up quickly. That’s not even to mention any customizations you may want in your home both aesthetically and functionally.
- Nature: Because new construction often happens outside of established communities, the surrounding nature can be unruly. You may have to factor in the price of landscaping into your new construction project to ensure your home gets the look, feel, and natural protection it needs.
Existing Homes
Existing homes are homes that have been around for more than a few years. They are typically located in established suburban communities and require a little more love and care. Just like new construction homes, existing homes come with a set of pros and cons that you should consider when buying your next home.
Pros
- Character: Existing homes have a story to tell. Countless families have made these houses their home and added their own personal flare to make it what it is today. When looking at existing homes as a homebuyer, you will have the opportunity to see many different styles and characteristics that you may have never considered in a home before.
- Community: Established in long-standing communities, existing homes allow you to find a community more easily. One of the many personal benefits of homeownership is becoming a part of a community by participating in local initiatives, joining your local church, participating in your child’s PTA program, and so much more. Buying an existing home may introduce you to new neighbors, friends, and hobbies.
- Nature: Because existing homes are older, they also have matured greenery. This growth of trees, bushes, and other plants actually work to protect your home from weather and natural wear and tear. Not to mention it gives your home a more homey feel.
Cons
- Maintenance: Existing homes come with a little wear and tear. Hopefully, you were able to get a proper home inspection before buying your home to get a better picture of larger issues that need to be taken care of in your new home. However, because existing homes come with a few years of wear, you can expect your maintenance repairs to start adding up.
- Customization: Buying an existing home may mean you had to sacrifice some items from your list of needs vs. wants. If this is the case and you want to buy your next home, but know you’ll be doing some renovations, check out our renovation loan products tailored to this specific situation. It’s also important to consider whether any renovations or changes you want to make to your home need to be approved by a Home Owner’s Association. These projects can truly start to add up and should be an expense you budget for after you make the biggest purchase of your life.
Selling your home and starting the home buying process can be intimidating. The first step is to understand all the available options to you and choose the best option for you and your specific situation. Whether you decide to build your home from the ground up or add your own touches to an existing home, the achievement of homeownership is something to be celebrated.
Contact one of our loan officers today if you have questions about starting the home buying process, selling your current home, or what loan program may be the best for you and your specific situation..
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We've begun to see signs that the Spring Market is here and could be robust! Here is what we know: According to NAR, home sales were up 14% in February over the previous month which marked the biggest monthly increase since July 2020. While March results are not yet published, the mortgage industry saw an increase in purchase applications for the 3rd straight month; a great sign for the housing market. Driving much of this activity is the stabilization of rates in January & February and lower interest rates this past month. We’re starting to see signs of a slowing economy and the markets are now pricing this in. This week we saw the 10-yr Treasury drop under 3.4%, a level it has not reached for quite some time and the lowest it’s been since September 9, 2022. This is great news for consumers as decreasing rates mean more home affordability. Over the past year, most markets have seen home prices stabilize if not even decline, albeit by a very small amount. This stabilization was still a relief for homebuyers as it helped to offset higher interest rates. As rates continue to decrease, we would expect home prices to again increase due to demand increases. In addition to increased demand, there is still a shortage of homes for sale nationwide and that will continue to worsen as more and more homebuyers enter the market. So what does it all mean? Now is a GREAT time to buy a home! Rates and home prices are stable, there is not as much competition as there will be when rates do decrease, and buying a home is still extremely affordable for most. Once rates fall, we will likely see home prices rise and the competition for the shortage of homes will increase alongside it making the window of a buyer-dominated market very small.
We are well into Q1 and feel confident saying that the market appears to be stabilizing. Before we start looking forward, let’s quickly look back at the end of 2022.
Buying a home is a huge investment and one we talk about often - BUT the flipside is that you have an opportunity to cash in on that investment when you’re ready to sell your home! While you do have the chance to cash-in, a lot more work goes into selling a home than you might think! If you are considering selling your home, working with a listing agent will help you market your home, negotiate with potential buyers, work through paperwork, and ultimately close on your home! So what is a listing agent? In its most basic terms, a listing agent is a real estate professional who represents the seller in a real estate transaction. The listing agent lists the home for sale and works on behalf of the seller to sell the home at the best price and terms for their client. Listing your home is a BIG deal and it is not a place to try and DIY. But why can’t you just grab a sign at Home Depot and try and sell yourself? Well, there are lots of reasons some of which include: Professional consultation: A listing agent will walk you through each step and tell you what to expect along the way! They should understand the specific community you’re in and the current market environment and will help you determine a competitive but realistic asking price for your home. Marketing and selling your home: Your listing agent will list your home on the multiple listing service (MLS) in order to better market your home to potential buyers. They also can make staging recommendations and hire a photographer to best show off your home and its features. They’ll schedule house showings, and can be present to answer any questions. Communication and negotiation: Communication is key to both buying and selling a home in order to minimize stress and misunderstandings. Listing agents take care of this important task, by staying in touch with interested buyers and their agents, fielding questions, handling paperwork, and negotiating the final sale price and terms. Recommendations: Seasoned listing agents might come with a list of professionals who they have worked with in the past that they enjoy working with in order to make the selling process smoother for you! Some of these professionals include: real estate attorneys or title companies, inspectors, stagers, those who specialize in home improvement AND of course trusted Loan Officers. How do I find the right listing agent for my situation? In order to find the right listing agent for you, make sure your agent is licensed and has experience, references, and a professional website where you can learn more about them and their qualifications. Most real estate agents work with both buyers and sellers, but some might specialize in one or the other. Once you find a few agents through referrals or online research, meet with them in person to ensure they meet your needs and work well with your personality. It is also important to ask questions during your meeting with them and it’s imperative that you determine what you’re looking for in an agent so you make sure you are happy with the product being delivered. Selling a home can be stressful, especially for first-time sellers. A listing agent can help by taking on some of the burden and providing the information and resources needed to help sellers make informed decisions. We work with agents on both sides of the transaction – if you have any questions or would like a recommendation for an agent in your area, please reach out to us!
