Buying New Construction Homes, the Pros and Cons
With the available inventory of homes in today's market, you might want to take a look at "new construction", which is a new property being offered by a home builder. Wondering if one of these is right for you? Here are some pros and cons you should consider.The Advantages
The most obvious advantage to buying a new construction home is that everything--from the roof and the windows to the appliances and systems--is new. And many items, along with the house itself, often come with warranties. That means you should see relatively low repair costs during the first few years of ownership.
Operating costs are also lower with newer homes since they are more likely to be energy efficient. Energy Star appliances, more efficient heating and cooling equipment and energy efficient windows can save you money in the long run. Many energy-efficient upgrades could even earn you an income tax credit (but don't take our word for it, be sure to check with your tax adviser).
Another pro is that if you purchase a new construction property early during the preconstruction phase, you might be able to customize many features, such as the paint colors and the appliances, to suit your personal tastes.
Here's the best part: A builder may lower the asking price or even throw in some free upgrades and amenities. And don't be surprised if a builder offers you financing options for a mortgage.
That said, it's important to know that builders can't require you to use their preferred lender. You still get to choose your home loan. But an offer from a builder's lender does give you another point of comparison to weigh as you choose the best mortgage for your financial needs.
Don't let the lure of "new" sell you without hearing some possible downfalls. First and foremost, you can't assume that a new construction home is in perfect condition. You should still get the property inspected by a professional home inspector prior to purchase to make sure that everything is properly installed and in good working order.
The second disadvantage: "location, location, location." Builders usually start communities where there's open land. So if you buy into a new suburban development, you'll likely find yourself further away from a city center. This could make your commute to activities or work much longer--and more expensive. The distance could also make the home harder to sell down the road, especially if the property is competing with newer houses with more updated amenities.
Another con to consider is if the home is in a new development. If that's the case, you don't necessarily know what the character of the neighborhood will be, as opposed to an established area that already has a "personality."
Yet another downfall is that you may want or need to spend more money on exterior projects, since there won't be mature landscaping.
Finally, since we can't control everything--especially Mother Nature--remember that any time there's construction involved, a homebuyer needs to be prepared for delays. So don't be surprised if your move-in date gets pushed back.
Armed with this information, you can now go tour some model homes.
Interested in learning more about the home buying process? Here are some AOL Real Estate guides that might help: