Answer: This one's an easy one to answer! It depends! See. Pretty easy.
Ok, all kidding aside, I'm a huge advocate for new construction. My wife and I have owned 3 homes over the past 12 years. Two of those were new construction; the 2nd and the 3rd. But are new homes better than existing homes? That question simply can't be answered. Are new cars better than old cars? You tell me.
My history shows my personal taste. I love new! But I have friends, family, and clients who absolutely love older homes; the older the better in most cases. Think about it. You can't buy a new, 1907 Victorian home in Redlands. You just can't! And you'd be hard pressed to find a brand new home in a neighborhood filled with 200 year old trees. You probably aren't going to find a new home in Yucaipa on a half acre lot either.Let's dig a little deeper into what's "better," and for whom.
Here is a list of reasons that might compel you to buy a brand new home as opposed to one that is pre-owned.
1. You have a choice!
With little to no change in sales price, new home builders typically offer choices as to color and styles of the features of your home. These aren't "upgrades," but they're still choices. Carpet color, tile, vinyl, counters, cabinet finishes, etc. You'll often have 3 or 4 choices in each category to choose from at no extra cost. These choices are made at the design center after we've negotiated the terms of your purchase. Design center? It's a complete blast! You're literally designing the interior of your home!
2. Possibilities of Negotiation.
When you buy an existing home you have terms with your lender and terms with a seller. The lender needs to profit, and the sellers obviously want their cut as well. When you buy new construction; a brand new home, you've got twice as much opportunity to negotiate. Why? Builders want to sell homes. They'll do everything they can (within reason) to close the deal. Often builders have an "In House Lender" (an affiliate or subsidiary) that helps buyers get into these homes by putting together attractive loan programs tailored to each unique buyers' financial circumstance. The builder and lender become one, and they typically share in the success of selling these homes. It's no longer two entities looking to profit from selling you a home. Understanding this allows me, as your agent, to negotiate terms on items such as:
- Sales Price
- Loan Terms
- Closing Cost Credits
- Design Center Credits
- Contingent offers, etc.
3. Shhhh! Listen! Do you smell something?
4. Competition
When buying new construction you're not likely going to be competing with multiple buyers for the same house. You simply pick your floor plan and elevation (appearance) or your floor plan on the lot you like, negotiate terms, then watch it being built!
Yesterday's "Upgraded" has become today's "Standard" features with new home builders. Dual-pane vinyl windows, energy efficient appliances, and granite counter tops have now become the standard that new homebuyers are looking for. Why worry about updating that dated kitchen when it will already be updated the moment you get your keys?
6. The whole is a sum of the parts
When you buy a 35 year old home, you've got 35 year old 'stuff'.' That 35 year old stuff is connected to other 35 year old stuff. To a buyer of an older home this often turns a seemingly simple plumbing or electrical problem into a massive investment. By massive I mean that the backed up sink in the guest-bath could lead to a $7,000 complete re-pipe of your 'new' house.
7. Infrastructure
In new home communities, you've typically got new sewers, new streets, lights, sidewalks, parks, and more. Sometimes cities even require new home developments to assist in developing the surrounding community as well, including schools, retail outlets, and more.
8. What sounds better; a walk through or an inspection?
With new construction there are no dreaded home inspections! When you buy a new home, everything is new! What's to inspect? With pre-owned homes, you've got those anxious days between the time you write an offer and the time you receive your pest and home inspections. After that is the fear of going forward, walking away, or renegotiating. New home construction closes with a final walk through. Now THOSE are fun!9. With new homes, appraisals are your friend!
Yes, your new home must appraise in order for a lender to fund, even on new construction. That said, it behooves the builder to price their homes accordingly. Have I seen new homes NOT appraise? Yes...once. In that case, the builder simply reduced the price to the appraised value.
10. Home builders sell to FHA and VA buyers!
FHA and VA buyers are typically well qualified and committed to the process. However, from a seller's point of view, FHA and VA offers are less attractive because they bring the results of the inspections in to play.
11. You won't have to buy (or ask the seller to buy) a Home Warranty
Your new home comes with one! Wait...it comes with several: Foundation, Roof, Fit & Finish, Appliances...everything!
12. Beyond any warranty
You've got a builder's reputation at stake, and they'll stand behind their product. With pre-owned homes the sellers have likely moved on, and you'll never see or hear from them again.
13. Safety Features
New homes are built to much, much safer building codes. Fire retardant materials, CO detectors, firesprinklers, smoke detectors, GFCI plugs, etc. Want ground fault circuit interrupters in your pre-owned home? Let's get a bid for that little upgrade from your local electrician.
14. Resale Value
"Honey. I'm never leaving this house! I love it!"...and then...
- Job transfer
- Babies on the way
- Kids are grown and move out
- Parents move in
- Change in family circumstance
- and on and on.
You may plan to live in your next home forever, but at some point you may look at selling. Reselling a modern home is often a simpler task than selling an older one.
I could easily create a list that's just as long and just as compelling advocating the purchase of pre-owned homes. In fact, I'm sure I will. However, at this point in my personal life, and with a young family in tow, I feel very peaceful living in a newly constructed home and I'm always at peace when I help a client negotiate a deal with a home builder.
Wait! You mean...I help people negotiate deals with home builders?
Absolutely! Countless times! Really, at this point I could only guess how many brand new homes I've sold. I've done it enough, in fact, that simply accompanying my clients on their first visit to a builder's model homes pays huge dividends. If I accompany a buyer to a builder's sales office, it affords me the ability to negotiate on their behalf. I've negotiated upgrades, closing cost credits, appliances...even fully landscaped backyards...at no extra cost to the buyer.
But wait, do I get paid a commission?
Yes! Well technically...no.
Let me explain. It's customary that the sellers of a home pay the listing and buying broker's commissions. In the case of virtually all new home communities, they don't pay a commission. They pay a marketing expense; a referral fee. This is not a line item on your closing statement. It doesn't come from the sale of the home. It's paid by a different department all together. Often the same one that pays for TV commercials, web presence, and print advertisements. This mean that a) you DON'T pay me; directly or indirectly, and b) I'm absolutely committed to giving you the very best service possible and negotiating aggressively and effectively on your behalf.
Thanks in advance for remembering my name when the topic of Real Estate comes up in conversation. If you're local , just remember Andy@LoisLauer.Com I'm always here to help.
My business thrives by word of mouth. If you appreciate the information provided on my blog, please share this post on your favorite social media sites, and with anyone you feel could use my service.
Until next time.
Andy Blasquez
Cell ~ 909.539.3292BRE#01826135
Please follow and share at YucaipaRealEstateTrends on Facebook
E-mail me on Andy.Blasquez@gmail.com
No comments:
Post a Comment