Are you thinking buying a new home in a newly developed community? Are you attracted to the sparkle and style of new construction? Are you set to make the move to a newly built house, but don’t know what questions to ask?
purchasing new construction is significantly different than purchasing a used home. It isn’t always harder (in many ways it’s easier) but you do need to consider various factors and ask many questions.
With older construction, you need to bring in an engineer to inspect the house and look for shortcomings. Many older home will have problems, and very often the repair will fall on the new homebuyer. From the seller’s perspective, their offering it at this price for the condition it’s in; while the condition is not perfect, you’re not paying for new construction.
In other words, they’re charging less for a used home because it needs repairs.
New construction, in contrast, should be delivered in great condition. While you will definitely need to do a walk-through inspection prior to closing, the procedure is much simpler. During construction, you can very often inspect the progress of building as it is being done. If you see something that is an issue, you are able to quickly correct it during the construction phase as opposed to going back and repairing it at a later date. Since most repairs and existing houses are the result of the age-such as split foundations, sagging walls, leaky ceilings, and dripping pipes, leaky faucets, broken tiles, drafty windows, lack of insulation, etc., you will have very little of these problems with a newly built home.
While you may surely hire an engineer to inspect a newly built house, they’re usually looking for defects that usually are not present in a new house. Further, since many new houses have a warranty, you have a level of protection you would not have with a old house.
Don’t be fooled by the price of an old home. The purchase price is only one piece of the picture. The renovations and repairs necessary to get the home in the condition you want can add tens or hundreds of thousands of dollars to the cost of that house. Furthermore, you often need to come up with that money “out of pocket.” In comparison, the newly built house is in as ideal of condition as possible, which is built into the asking price, and could be paid for with your mortgage.
Let’s look at an example: a new construction in Commack New York that is over 3400 sq.ft. is just over $1 million. The home is in brand-new perfect condition and ready to move-in. A similar “used” house in the area of the same size may be $950,000. While it may appear that you “save” $75,000 on a used home, you’re purchasing a house that’s twenty years old, will last twenty years less, and already has twenty years of wear and tear. Since most houses have a useful life of 65-80 years, you’d be buying a home with less long term value.
With existing homes, you could need to remodel. The kitchen could need to be fixed, bathrooms replaced, and other repairs made. The older home may not be the exact design you want. This could require structural changes to the house – which could demand six months of additions while you’re living in the house. These remodeling may cost $50-$100,000 and will be money you will need to produce out of pocket. Had you purchased the new home for slightly more, you would not need to come up with an additional $75,000 out of pocket, would not need to live free six months of construction, and would have a perfect ready to occupy a home on the day you close.
So does this mean new homes are perfect? No. But generally speaking, they are the better option. When talking about something this size and the scale of the new house, there will always be issues. It is far easier to deal with those issues with a creditable builder during the construction process than it is to deal with them on your own after you have purchased the house and have no one to go to. Items such as a leaky faucet or broken tile can easily be repaired or replaced by the builder at no additional cost whereas doing such repairs on your own with the older house requires time and money on your end.
TIP: Be sure to work with a creditable builder in your area who you can turn to with questions and ideas. Try to produce as many ideas as possible at the very beginning of the process before construction; moving walls after rooms have been constructed can be very costly, whereas relocating them before building is started will carry relatively low cost.
Craig Axelrod is one of the partners with Emmy Homes. Emmy is which is one of Long Island’s premier home builders. Emmy’s Commack real estate features luxury homes in Commack. Visit EmmyHomes.com for information.
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