A basic question each prospective home buyer faces is whether to buy a brand new home or an existing home. Although prices can vary greatly from one location to another, generally new homes cost 10 to 20 percent more than comparable existing homes. New homes offer the benefits of modern designs and popular colors, near-perfect condition, and new appliances. In addition, builders often offer attractive financing and assistance that is superior to current market rates. And, new homes usually appreciate more rapidly during the first five years than existing homes over the same period.
Existing homes are more attractive to many buyers because they tend to be in more established neighborhoods, closer to shopping, schools, and other conveniences. Also, the neighborhoods are often more visually appealing, since trees and shrubs have fully matured. And, the character of an existing home is sometimes an issue, in comparison with the newer subdivision houses. The financial advantage can be important, since the prices are not only lower, but so are the immediate after-sale costs, such as fencing, lawns, shrubbery, drapes and blinds, etc. However, a new home is much less likely to incur any unexpected costs from things wearing out, such as the furnace, air-conditioning, water heater, appliances, carpeting, and the roof. So, it’s very important to consider the results from any inspections and to understand any warranties offered on either type of home purchase, but especially when buying an existing home.