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Pondering a New Home: New Construction or Existing?

Todays Date: September 19, 2018

Are you considering purchasing a new home in a newly developed development? Are you tempted to the sparkle and style of new construction? Are you ready to make the move to a newly built home, but don’t know what questions to ask?

buying new construction is significantly different than purchasing a used home. It isn’t necessarily harder (in many ways it’s easier) but you do need to consider many factors and ask various questions.

With old construction, you need to bring in an engineer to inspect the home and look for defects. Many used house could have problems, and very often the repair will fall on the new housebuyer. 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 comparison, should be delivered in excellent condition. While you will definitely want to do a walk-through inspection prior to closing, the process is much simpler. During construction, you may very often inspect the progress of building as it is being done. If you find something that is an problem, you are able to promptly correct it during the construction phase as opposed to going back and fixing it at a later date. Since many repairs and existing homes are the product of the age-such as cracked foundations, sagging walls, leaky ceilings, and dripping pipes, damaged faucets, cracked tiles, old windows, lack of insulation, etc., you could have very few of these issues with a newly built house.

While you can surely hire an engineer to inspect a newly built house, they’re generally searching for defects that usually are not present in a new house. Further, since many new homes have a warranty, you have a level of protection you would not have with a old home.

Don’t be fooled by the cost of an old home. The asking price is only one piece of the picture. The renovations and repairs necessary to get the house in the condition you need could add tens or hundreds of thousands of dollars to the cost of that house. Additionally, you often need to come up with that money “out of pocket.” In contrast, the newly built house is in as good 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 3500 sq.ft. is just over $1 million. The home is in brand-new excellent condition and ready to move-in. A similar “used” house in the neighborhood of the same size could be $950,000. While it may appear that you “saved” $75,000 on a old house, you’re purchasing a home that’s 20 years old, will last 20 years less, and already has 20 years of wear and tear. Since most houses have a useful life of 60-75 years, you’d be purchasing a home with less long term value.

With existing homes, you could need to remodel. The kitchen may need to be replaced, bathrooms replaced, and serious repairs made. The older home may not be the exact design you like. This could require structural changes to the home – which could demand six months of renovations 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 bought 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 houses are perfect? No. But generally speaking, they are the better choice. 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 bought 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 the repairs on your own with the used house needs time and money on your end.

TIP: Be sure to work with a dependable 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 built can be extremely costly, whereas moving them before building is started will carry relatively low cost.

Craig Axelrod is one of the executives with Emmy Homes. Emmy is which is one of LI’s most established home builders. Emmy’s Commack development features new construction in Commack. Visit EmmyHomes.com for information.

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