Should I buy New Construction or an Older Home?
Home Buying New vs. Old Home Dilemma
Many home buyers are sometimes puzzled with what they should or can buy. Should they buy a brand new home or resale home? In Central Florida, there is an abundance of new construction and buyers always have a choice whether to buy brand new construction or a resale home. Pretty much it is their choice which to buy as long as it fits the budget.
New construction homes are popping up where their used to be vacant areas of land. In older established areas, they are tearing down the old to build new. Orlando is a popular place to live and that demand is creating new highways spurring new areas of growth for the future. More housing will occur around Wekiva Parkway (Northwest), Osceola Parkway extension (South), Innovation Parkway (Southeast), East West extension (East), Poinciana Parkway (very South). This is in addition, to all new construction occurring in Horizons West, Lake Nona, Davenport, and the pockets in between.
Reasons Home Buyers Buy New
It’s been my experience new home buyers will buy a new home for the following reasons:
- If they have purchased brand new in the past, it is highly likely to purchase new in the future.
- They do not want immediate repairs.
- Because their location needs and budget allow it.
- They want energy efficient homes.
- Buyer wants updated floors plans, open concept, drop zone, craft rooms, doggie showers, more ensuite bedrooms, tall ceilings, media rooms.
- Buyers cannot find what they are looking for on the resale market, so want to customize.
- They do not want to spend the time or money remodeling an older home
Reasons to Buy an Older or Resale Home
- Home buyers need to be in a specific location or school district.
- Pools are already built with the home and price.
- They want a neighborhood with established vegetation and trees.
- They do not want to wait for the build time.
- Don’t like cookie cutter neighborhoods, that occurs in new construction.
- Don’t want to live in an HOA.
- Their budget is not enough for the new contruction market.
- They want larger sized lots.
1) Pricing Difference in New vs. Old Home
Pricing with brand new homes can be unpredictable, if you build from scratch. New home pricing will include the base price of the home, lot premium, and additional structural or design upgrades. Most often, final pricing is determined after you are under contract and have picked out upgraded options at the design center. An exlusive buyers agent can help you sort out pricing and the best options before you go to contract.
TIP: Make sure your loan approval covers the amount you want to spend on upgrades. Last year, we had a buyer receive the incorrect loan approval from their bank. The buyers ended up borrowing money from their parents in order to put upgrades in the home.
Don’t assume the price of the floor plan you see on the builder website is the price you will pay. For the average home, you can add another $20,000-50,000+ to the base price you see online because of the upgrades.
If you need accurate pricing or a total price before you go to contract, then you will want to buy an “inventory”, “quick move-in”, or “spec” from a builder. Since the home is completed, these prices are predetermined prior to you signing a contract. The price will include the land, upgrades, home, and any extra features.
Similar to buying a brand new inventory home, a buyer will know the final price at contract if they elect to purchase a resale home instead.
2) Timing of Your Purchase
Buyers who build brand new from the dirt up will have a longer buying period. Most brand new homes take 6-9 month before you can close and move in. There are more long term decisions buyers have to make. Such as will your financing picture be the same in 6-9 months (upfront deposits and employment), do you have a place to stay during the build time, school attendance timing for children, ability to attend design appointments, selling a home and relocating before completion, tolerance for changing interest rates.
One thing home buyers do not realize that is interest rates could be drastically different in 6-9 months out. There are rate locks available earlier than 60 days before closing, but they require upfront money.
Do you have time see multiple buildlers? Purchasing new construction requires alot more preparation with home tours, questions, and analysis.
When we take on a client, depending on your criteria it may take over week to seek out all the buying possibilities. Not all the builder fully utilize databases to provide their full availability. It can take many phone calls to cover all the available suitable builders. What their website states may already be outdated. We like to check on what is current.
If you think these could be obstacles for you, then purchasing a brand new inventory home or resale maybe the way to go. There are fewer varibles when you close in short time period of less than 45 days.
3) Charm vs. Modern. OR New vs. Maintenance.
There is no question older homes in downtown with towering oak trees, brick paved streets, and large front porches are quintessential charm.
Many of those locations can even be “walkable”. However, older homes do not always offer open floor plans, large closets, multiple rooms or energy efficient building. Learn more why it is necessary to conduct inspections and what to consider when you inspect older home.
All resales need some level of work, repair, or upgrades. If your inspection reveals a long list of repair items, a good buyers agent will help you to decifier it; whether to stick with the home, renegotiate the contract, or move on to something better.
Buyers that are not finding what they want or need on the resale market, should consider a brand new home as an alternative.
Most brand new homes are built in a planned communities with an HOA. The first thing that is apparent is all the old mature trees have been removed and replaced with baby ones. It will take a commmunity 15-20 years for trees to change the look of the neighborhood. If that is ok with you, then buying a brand new home will offer energy efficient features.
Energy efficient features include radiant barrier in roofs, more insulation, low flow faucets, toilets, and shower heads. Spray foam insulation in roof or walls, energy efficient light bulbs, air conditioner, low VOC paint and carpets, and double pane windows are the common inclusions. All of this translates to a reduced energy and water bill.
New construction is mostly abundant in the suburbs and out skirts, and rarely can you find walkable community, with the exception of a few. I would say the areas hugging lake Apopka, include South Apopka, Ocoee, Oakland, and Winter Garden are growing tremendously with access to West Orange Trail and restaurants, shops, farmers market in the town of Winter Garden.
Home buyers do not always have to figure out a new or older home, we can help explore both options with any home buyer working with our office. Buyers Broker of Florida puts the home buyer needs first to figure out which homes might work the best. If you are looking to explore Orlando Real Estate, please schedule a phone consultation with our office 407-539-1053. We would love to hear from you.