There are pros and cons on both sides of the older home vs. new construction debate
When it comes to buying a home, one size does not fit all. Understanding the pros and cons of buying an older home vs. new construction can go a long way in helping you make the right decision.
Some pros and cons depend on the neighborhood and can apply to either new or older homes. For example, existing or new neighborhoods may require homeowners association fees, and may have restrictive covenants that limit such things as exterior color selections and the style or addition of fencing and outbuildings, as well as the types and numbers of pets allowed. Some buyers would consider covenants a big plus, others might find them too restrictive. Whichever kind of buyer you are, know exactly what you’re getting into before you make an offer.
Other factors stem directly from whether a house is older or brand new.
- Built to the latest codes and standards, new homes are generally energy efficient.
- Appliances are under warranty, and all the surfaces are fresh, clean and new.
- No major maintenance should be required for several years.
- If you are building a custom home, you can choose the style, the layout and the surfaces you like.
- Even in a tract home, if you buy early enough in the building process, you may be able to choose your siding and roof color and select flooring and countertops.
- Layouts are typically modern, with open floor plans designed for casual living. For some buyers, this might be a con.
- Builders may offer surface upgrades and closing cost incentives to encourage sales. (These incentives may only be available if the buyer agrees to use a builder-designated lender and/or title company).
- Cost per square foot may be higher than for an existing home.
- Builders have set a specific price point for their homes, so there is limited negotiating room on price.
- Buying new likely means that you’ll have the expense of new window treatments.
- You may be required to pay for landscaping and/or sod or seeding.
- Because most new homes are built in subdivisions on the outskirts of a city, a new home may also mean a longer commute.
- Most new homes are part of a development. These developments can be as small as a handful of homes on a cul-de-sac or as large as several hundred family homes. Your neighbors’ home may look much like yours, with similar floor plans and facades. For some buyers, that neat homogeneity is a plus, for others, a con.
- Lots in a new development are often smaller than those in established areas and are cut in a similar size and shape. Mature trees are often few and far between.
- All builders are not alike. Some build quality products that they warranty for a designated period of time and others do not. Check with the Better Business Bureau and snoop around online before purchasing from any builder, and ask other homeowners in the development whether they are pleased with their purchase.
Buying an older home
- In most markets, there are more resale homes available than there are newly built homes.
- There is more variety in terms of style and architecture.
- Existing homes are typically available in most neighborhoods, some of which may be more conveniently located than new subdivisions.
- Original, now-premium features, such as hardwood floors and decorative moldings, might be part of the package.
- Pricing may be more negotiable.
- Lawns and landscaping are established, and the yard may have mature trees.
- Window treatments are typically in place.
- Surfaces may be worn or dated.
- Appliances are no longer under warranty.
- More maintenance and/or remodeling may be required.
- Depending on when the home was built, the home may be less energy efficient and more costly to heat and cool.
- A thorough home inspection by a licensed professional inspector is a must and may reveal problems that you do not want to inherit, such as a cracked foundation, a leaky roof or basement, or seeping sewage lines. If the inspection reveals fixable flaws, propose the seller do the repairs or lower the price.
- Expect the unexpected. Appliances quit, toilets leak, and furnaces fail as components age.
Buying an historic home
If you have fallen in love with a designated historic home or with a home in a designated historic district, here are some facts to consider.
- A home or neighborhood is deemed historic or architecturally significant by the National Register of Historic Places or by your area’s local historic board if it exemplifies signature architectural or period styling, or if it is associated with famous architects, builders, craftspeople, or homeowners from the past.
- You may qualify for tax benefits for investing in an historic home, but tax levies in an historic neighborhood may be significantly higher than other areas.
- The goal of a historic designation is to preserve a home’s original character and construction, so these homes are subject to restrictions aimed at protecting the character of the property and/or neighborhood. Rarely are homeowners permitted to add square footage. Exterior features, such as shutters, roofing and siding can likely only be replaced in kind. Because these selections are likely no longer available, they may need to be custom built or purchased from a salvage dealer, which can add significant expense.