Video Transcript: Pros and Cons of Buying a New Construction
Stacey: A surplus of inventory has today's housing market full of affordable homes – some of which are new constructions. What are the pros and cons of buying new? Let's find out, on "What Works Now"
Voice Over: AOL and Bank of America Home Loans – helping you find out what works now.
Narrator: When we refer to new construction, we're talking about a brand new house that's built by a homebuilder.
Stacey: The first pro in buying a new construction is that everything--from the roof to the home appliances-are, well, new.
Narrator: And many times these appliances often come with warranties. That means you should see relatively low repair costs during the first years of ownership.
Stacey: Also, operating costs could be lower, since newer homes are more likely to be energy efficient.
Narrator: 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 can even earn you income tax credit. But don't take our word for it. Be sure to check with your tax advisor.
Narrator: Another pro? Customization at buying during pre-construction. If you purchase the home during the pre-construction phase, you might be able to customize many features, ranging from the paint colors to the appliances, to suit your personal tastes. And lastly, financing options for your mortgage.
Stacey: A builder may offer you financing options on a mortgage. That said, a builder can't require you to use their preferred lender. You still get to make that decision.
Narrator: Now although we've discussed some great things, don't let the lure of "new" sell you without hearing some possible downfalls. Con number one: you still need a home inspection. First and foremost, a new home should still be inspected by a professional home inspector prior to purchase to make sure that everything is in good working condition.
Narrator: Our next con: a less than ideal location. Builders usually stat communities where there's open land. So if you buy into a new suburban development, you'll likely find yourself further away from the city center. This could make your commute to activities or work longer and more expensive. And yet another con is the expense of exterior projects.
Stacey: Since there may not be any mature landscaping, it's possible you may have to spend more on outdoor projects.
Narrator: Lastly, there's the unpredictable nature of construction. Since you can't control everything, especially Mother Nature, remember that anytime there's construction involved, a home buyer needs to be prepared for delays. So don't be surprised if your move-in date gets pushed back.
Stacey: So those are the pros and cons. Now it's time for you to decide if a new construction is right for you.
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