New Construction or Pre-Owned Home?

At certain price points in certain areas, many buyers can be presented with the option of purchasing a preowned home or buying new construction.  For those who like items for a pro’s and con’s list, here are some to ponder in the decision making process.

New Construction- Pro’s

• Builders Warranty
• Customization
• Less likely in need of repair in early years
• Modern finishes, features, and floor plan
• Clean and New
• Likely choice location

New Construction Con’s

• Hidden or unknown expenses
• Easy to blow budget
• Not included items in builder’s cost (appliances, lawn, gutters, etc.)
• Waiting for it to be finished
• Timing with a sale of previous home

Pre-Owned Home Pro’s

• More known timing for move in dates
• Flexibility in pricing and negotiations
• Often ‘complete’ with nothing to finish
• Character that is hard to recreate in new homes
• Established neighborhood

Pre-Owned Home Con’s

• Other people’s messes
• No warranty
• Unknown immediate repairs and fixes
• May need updating to suit tastes or needs

With a real life example, clients Jill and Patrick* were looking for a 3-4 bedroom 2 story home in the Byron Center area for $200,000.  This allowed them the opportunity to seek out new construction and pre-owned homes.  While the new construction home hit their price point on the mark, they soon came to the realization that it did not include many necessary items such as appliances, lawn, landscaping, underground sprinkling, window treatments, and gutters.   All of those other add ons that were more needs than wants were adding an additional $30,000 to their price tag and that didn’t even include eventually having to finish the basement.  While the new smell was intoxicatingly appealing, Jill and Patrick decided to wait patiently for some used homes to come on the market.  Soon they were rewarded with a 15 year old two story in a wonderful established neighborhood.  Sure the house needed some updating, but it was move in ready.  The A/C unit did go out within the first month, but they had prepared for that fact and since they had ‘saved’ $30,000 in avoiding those extra costs with new construction- a $3,000 fix was easier to swallow.  In the end, they got the best home for their family at a price that made sense.

*names changed to protect client privacy