New House or an Old One?
Consider the pros and cons to each
By Michele Dawson
As you embark on your venture to buy a home, one of the first decisions to make is whether to buy new or purchase an existing home. Each choice has its advantages, and there is no single answer that works for everyone.
You may be drawn to the shiny new, energy-efficient appliances, the great room, and the beautiful master suite offered in a new home. But you may also like the charm, the canopy of trees that drape over the sleepy neighborhood streets, and the increasing value of an existing home you've been eying.
Here are some things you'll want to ponder as you decide which route to take.
Existing homes offer many considerations for potential homebuyers, including:
- The neighborhood. Many people are drawn to developed neighborhoods for the sense of community that has been established. The mature landscaping and developed trees are often a considering factor.
- Maintenance and repair. If you're considering an existing home, be sure you have a good handle on the working status of all major systems. Hire a professional home inspector to check out the house. As appliances and systems age they naturally require repair and replacement, something which may be reflected in a purchase price.
- Home improvement. If you enjoy small repairs and home improvement projects around the house, then an existing home would be your cup of tea.
- Existing features. When you buy an existing home, you typically don't have to worry about buying the extras, such as blinds for the window, a security system, or a landscaped back yard.
- Land. In most metro centers, new homes may have less land than newer properties. Why? Because of changes in land-use patterns.
- Location. Existing homes are often found in older, more convenient metro core areas rather than outlying suburbs.
- The opportunity to remodel. In some cases buyers may prefer an older home in a particular location which can be modernized or expanded. In effect, use the existing home as a base to build a unique property.
- Price. In general terms, existing homes tend to be less expensive than new properties. As well, existing homes are likely to come complete with items which may represent new home extras—blinds, landscaping, built-ins, etc.
- Track record. When you purchase an existing home, you know how much the property has appreciated over the years -- in effect, you have an index of sorts which measures the community's marketplace appeal. At the same time, like stocks and bonds, you know that past results do not guarantee future marketplace performance.
- Taxes. Depending on your state, you will likely have lower property tax rates. Also, many older households aren't required to pay for local bonds associated with new development, such as schools, parks, or road or transportation improvements.
- Traditional layout. If you like the formal living and dining rooms, an existing home will likely satisfy you.
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