Buying a home is never a “one size fits all” process. After all, the most strategic and successful home buying transactions are conducted by buyers who seek solutions perfect for them.
At a bare minimum, the property itself needs to be just as unique as you are — and that means choosing the right type of listing. When browsing through homes for sale, you’ll see two kinds of listings: newly built homes and existing homes.
In this article, we’re taking the house hunting process a step further by looking at what kind of property is right for you.
House Hunting: New Construction or Existing Property?
Buyers can either shop for existing homes or new construction homes. Each comes with its own benefits and drawbacks, so making the best decision for your own situation means learning about both options.
As you may have already guessed, a new construction home refers to a development that has just been built. These homes, along with everything inside them, are completely new. Since it’s a new building, these listings have never been occupied before. Buyers of new construction homes are the first ones to live in the home, which can create an intensified sense of homeownership.
These newly built homes are a clean slate — but buying new construction has its ups and downs. Here’s the breakdown:
For many buyers, the most attractive element of new construction is their customization potential.
Since the home is being built, it can be exactly what you want it to be. Even homes that aren’t fully custom can be stylized to the buyer’s likings with choice finishes and materials. This potential for ground-up personalization in design isn’t possible with existing property types.
Another benefit of new construction is their lack of wear-and-tear. On average, homeowners spend around $1,100 on home repairs every year. But new construction properties do not carry the cumulative weight that older homes do. As a result, they typically require less maintenance than existing homes. They also usually include modern energy-efficient appliances, which help keep the monthly energy bills down.
The low maintenance expenses and utilities save homeowners money on upkeep and care.
But, the financial savings end there. New homes can be priced at significantly higher rates than comparable existing homes. Historically, new construction costs about 20% more than resale homes – something you’ll certainly need to factor into your budget before your start house hunting.
If you have a short timeline, new construction may not be the best option. These deals can take a lot of time to get to closing and move-in since development timelines can vary.
Location also plays a part here – buyers who are house hunting in the city may not find new construction. Since the land is being developed, newly built listings are usually found in rural areas.
At the same time, the competition may be higher since there are comparatively more existing homes listed than new construction opportunities. The difference can be significant. In 2018, the United States market recorded 3.77 million existing home sales and only 44,000 new construction sales.
Existing homes are the most common listing type you’ll encounter on the market. The listings have already been “home” to at least one other occupant – or more in the case of older properties. This essence adds a rich layer of history to the home, giving it a sense of personality absent from new constructions.
However, choosing a new home has both positives and negatives. This is what aspiring buyers need to know:
All in all, existing homes are an easier and more accessible property type to purchase. The most notable advantage that existing homes have over new construction homes is availability.
The market is full of existing homes, composing the bulk of the nationwide inventory. Most of the homes that you browse through on a listing portal are existing homes. That means buyers have greater flexibility with location and timelines. These listings can be found just about anywhere, be it urban, suburban, or rural locations. Existing homes also tend to be move-in ready, so buyers don’t need to wait or worry about extended timelines.
The sheer supply of existing homes also has a price-balancing effect on the market. Since there is an ample supply of existing homes within the U.S. inventory, these previously-occupied listings are typically more affordable for buyers.
Homes that have a history also have a greater requirement for maintenance. The effects of the elements, previous tenants, and other factors all add up over time. Older homes naturally have experienced more distress than new construction properties.
This wear-and-tear can ultimately increase the overall price of the home. If buyers need to invest in costly ownership responsibilities every year, the operational expenses need to be factored into the purchase. Besides regular maintenance and repairs, existing homes are known to consume more energy than new construction properties. This increases the monthly utility bills, which also negatively impacts the total costs of ownership.
From a design perspective, existing homes limit buyers in how much they can customize the basic floorplan. While the home’s elements can be adjusted, making more significant changes will require a costly renovation plan — and that nullifies the savings associated with buying existing homes.
Making the Right Choice for You
At the end of the day, the decision between an existing home and a newly constructed property is about personal preferences. Each buyer will have their own style that’s just as unique as they are. Finding the perfect place to call home is all about you… and that means getting clear about what you’re looking for.
Buyers who are house hunting need to know themselves before they hit the market. Gauging you and your family’s needs — now and in the future — is the best strategy. In terms of a new home or an existing one, weigh the pros and cons against each other and let your situation guide the decision.
Whether you’re on the market for an existing home, new construction, or land to develop, explore what HomeFinder has to offer. Visit HomeFinder’s listing portal to browse through homes for sale and land for sale all over the country.