Old House Vs. New House: Which Is The Better Option For You?
If you’re ready to take the first steps to buying a home, you may be wondering whether you should purchase a new construction orolder home. New construction homes tend to be larger and have a more modern layout. In comparison, older homes may be located in more established and eclectic neighborhoods.
There are pros and cons to consider with both old and new properties when you’re searching for the right home – it all depends on what you’re looking for and your lifestyle. Are you looking to move into a home that’s ready as-is and doesn’t need any major updates? Or are you looking for an older home with character, and are willing to invest in real estate that requires some fixing?
Creating a checklist of your “must-haves” may help you work through the old house versus new house debate once and for all. Let’s look at a few pros and cons of each to help you get started.
The Pros Of New Construction
New construction is any home where you’re the first person to live at that residence. For instance, you may purchase an already built home directly from the builder. There are many advantages to new builds:
- Layout: Building a new home is usually done with modern families in mind. For instance, most have a family room adjacent to a spacious kitchen. This accommodates your need to have one large room where your family can spend time together.
- Amenities: Newer homes often include updated developments like a pool or gym. This is a great perk because it means you don’t have to worry about paying for and driving to a fitness facility.
- Fewer repairs: Buying a new construction home over an existing home typically means you’ll have fewer repairs or renovations to do. It can be a huge relief to know that it’s unlikely you’ll have to take on any costly projects after moving in.
- More energy-efficient: New builds also tend to include new, energy-efficient features like modern appliances, windows and insulation. This means your home will stay warmer during the winter and cooler during the summer months.
- Warranties: New construction often includes new appliances that come with warranties. Some builders even offer extended warranties on new construction homes. This can give you a lot of peace of mind, especially if you’re a first-time home buyer.
- Customizable: When you purchase a new home, you can often customize it to suit your personal needs and preferences. You may be able to choose things like paint colors, types of appliances and whether the house is carpeted or comes with wood floors.
- Resells: Unless this is your forever home, you’ll likely resell and upgrade homes at some point. The updated features that come with a new home can make it more appealing during the resell.
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The Cons Of New Construction
While there are a lot of great features that come with buying a new home versus an old home, there are trade-offs as well. Here are some of the downsides to consider first:
- Higher price: The modern layouts and conveniences of a new house don’t come cheap. You’ll likely pay a higher price than you would if you chose an older house. However, you may find that the price per square foot is less for a new home.
- Potential HOA fees: Newer neighborhoods tend to have amenities like pools and gyms. That means you may end up paying homeowners association (HOA) fees to maintain them. But having HOA fees can make it easier to maintain the value of your home.
- Typically, less charm: Builders want to increase their profit margin, and one way they do this is by offering a limited number of floor plans. New construction neighborhoods tend to look very similar, and you won’t experience the charm you see in older homes.
- May have a longer commute to work and schools: Again, since builders are looking to save money, they often choose to buy land outside of the city. This could result in a longer commute to work and school.
- Limited or no negotiating room: Timing is everything when it comes to buying a home, and if you approach a builder at the end of their fiscal year, you may be able to negotiate on price. But for the most part, there’s little room for negotiation when it comes to selling new construction. You may be able to request certain upgrades, but the price is unlikely to change.
- Extensive landscaping: New construction homes may require extensive landscaping, which can take a lot of time and money to complete.
- Drawn-out appraisal process: Lenders have to use a new construction appraisal to assess the value of an unfinished home. They also require the appraiser to visit your home again once it is complete to verify it meets the provided specifications.
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The Pros Of Resale Homes
Let’s be honest – there’s a certain charm that comes with buying an older home. You may find a spiral staircase, black-and-white tile floor and other features that are nearly impossible to find in new construction. Let’s look at some of the advantages of buying a resale home.
- More styles to choose from: Of course, there are some older neighborhoods where all of the houses look similar. But in general, established neighborhoods tend to come with greater variety with the home style types and floor plans, and don’t have the same “cookie-cutter” look you find with new homes.
- Typically have lower prices: Older homes tend to need a little more TLC than new houses, and they may require major updates. For that reason, you may be able to negotiate a lower price with the sellers, or even negotiate for the sellers to pay for part of the closing costs.
- Established neighborhoods: Older houses tend to be located in more established areas and have a stronger sense of community.
- If the home was maintained, many repairs have already been made: Some people claim that resale homes are money pits, but you may find houses that have already been updated. Since the house has been lived in for a long time, it’s likely that most major issues have already come up.
- Fully grown shrubs and trees: When you purchase an older property, it’s likely that the home already has mature landscaping and won’t require a ton of time for extensive upkeep.
- Faster buying time: The average time it takes to buy an existing house is usually faster than purchasing new construction. That means you can close on your house and get settled much sooner.
The Cons Of Resale Homes
There’s no getting around the fact that older homes come with features that you won’t find in new construction. Buying a resale home could be the right choice for you, but there are certain downsides to consider:
- Smaller: The average floor plan size has gradually increased over time. According to data from the Census Bureau, the median single-family home size was 2,333 feet in 2020. In comparison, the average single-family home was 1,525 feet in 1973. Older homes often come with less storage space, smaller bedrooms, and don’t have a primary bedroom.
- Less energy-efficient: A resale home was built with older materials, which means that the windows and insulation are probably more dated. Some resale homes may even have additions that tampered with the home’s structure or even contain code violations. There are ways to make an older home more energy-efficient, but it could cost quite a bit.
- More maintenance: You may find yourself having to upgrade the roof, buying a new furnace or replacing worn carpet. There are certain changes that you need to make to a home every few years.
- Older appliances: Unless you find one of those older homes that has been completely updated, you may also need to replace appliances. This is not only to update your home, but it also helps when trying to resell the home.
- Fewer accessibility features: Older homes often lack the accessibility features that are more common with new construction. This may not matter to you right now, but what if an older relative needed to come live with you in the future? You may have a harder time accommodating them in a dated home.
- Could contain hazardous materials: Until fairly recently, lead and asbestos were commonly used to construct residential homes. That means an older home could contain hazardous materials that put the health and wellbeing of your family at risk. If you’re considering buying a resale home, make sure to have it thoroughly inspected for hazardous materials.
- A home warranty may not cover replacements: Many people will purchase a home warranty to cover any necessary updates to appliances. But if the previous owner poorly maintained the appliances, your home warranty company may refuse to pay for those updates.
The Bottom Line: Determine What You Need In A Home
Regardless of whether you buy a new home or an old home, buying a home will require plenty of research, patience and compromises. Making a checklist of your must-have features can help you identify what you can’t live without in a house.
Ready to start the home buying process? Check out our mortgage calculator to have a clearer idea of what your budget is, before starting your house search.