The Pros & Cons of Buying a New Build Home

Posted by Ed Machart on Thursday, March 25th, 2021 at 10:56am.

Want a master suite with a walk-in closet? A double attached garage? A newer kitchen with high-end finishes and appliances? An open concept floor plan so you don't feel like you're cut off from your company when preparing dinner? These are not unreasonable desires for your next home but can be hard to find in pre-owned homes on the market, especially if the homes you are looking at are 25+ years old.

So you've exhausted the market and are now considering purchasing a new build. You get to choose the floor plan and the finishes, so it's understandable that you would be feeling this as an option. No matter how shiny and new sounds in theory, though, there's always pros and cons that should be considered before you buy a house. Let's dive into the advantages and disadvantages of buying a new build!

The Pros

Floor Plan Choice - With a new build, you will have control over the floor plan. You can either shop around for a builder who is currently building homes with a floor plan that you like, or you can work with an architect and start from scratch to design the exact space you want.

Exterior & Interior Customization - Nobody knows your wants and needs better than you do, and having so much control over the details is quite a luxury. Some builders offer pre-designed packages with color scheme options. So, you get to choose the package that you love, but your options are limited unless you want to pay for an upgrade. Working with a custom builder, though, you will have complete control over every choice, from the countertops to the light fixtures.

Brand New - There's something to be said about moving into a home no one has lived in before. Everything is spotless and pristine, and every detail was put there specifically for your use.

Energy Efficiency - Many new construction homes are taking advantage of innovations in energy efficiency. And if you buy new, there is a good chance that you will be getting a home specifically built to use less energy, including insulation, heating, cooling, and appliances.

With new construction homes, you have more say over the strategies that could reduce your home's carbon footprint (and your energy bill later on). Your builder may already include some of those options, like energy-efficient windows, which can prevent the 25-30% heat gain and loss attributed to less efficient windows. Other energy saver options include dual flush toilets, smart thermostats, and LED lighting.

Lower Upfront Maintenance Costs - New homes aren't necessarily impervious to needing repairs. Still, the chances of having to fix a foundation crack or leaky roof are significantly lower, meaning less stress and money spent in the first few years on home maintenance.

Additionally, most builders include a range of warranties with their homes, including a short-term full structure warranty and a longer-term exterior warranty. It's a significant financial benefit and quite a relief in the years following such a major purchase.

Work is Done For You - With new construction property, the work you need done is done for you by a professional. You don't have to lift a finger, paintbrush, or hammer.

Newest Technology - New homes and condos often come equipped with the latest technology built right in, alarm systems, speaker systems, Internet wiring, and cable, saving you lots of time, money, and holes in the walls.

The Cons 

Not All Builders Are Equal - The experience of buying a new construction home varies amongst homebuyers because the policies, skills, and available options can vary quite a bit from builder to builder. When choosing a builder, look beyond the pictures on their website and ask as many detailed questions as possible to ensure you're making the right choice. Ask if you can see other homes they've completed, and talk to homebuyers who have previously built with them, and make sure no significant complaints are filed against them.

Upgrades Aren't Cheap - The first price you see when choosing a new construction home is the property's base price. This usually includes just the structure and lot without any optional add-ons. It also includes the standard finishes, which are often not the highest quality options.

To get your house looking the way you want, you'll likely need to choose some upgrades—like hardwood instead of carpet, kitchen upgrades, and recessed lighting—which can drive up the price of your home quite quickly.

Less Negotiating Room - When you're buying a pre-owned home, the price is set by the market and by the previous homeowner, who may or may not understand the actual value of their home. Because of that, negotiating is just part of the process, and it's rational to expect that you'll pay less than the price you see on the listing, provided there isn't competition for the property. However, when you're buying new construction, what you see is usually what you'll pay, plus any upgrades.

Home builders don't typically lower base prices on new construction homes because it can alter the comparables of the overall development and could lead to more buyers looking for ways to negotiate a lower price. On the other hand, they may offer some discounts or incentives, so consider asking for those instead of a lower price when negotiating with your REALTOR®.

Higher Cost - For the same reasons stated above, builders don't like to lower the base prices on homes, which means your Brand new home could cost up to 20% more than a similar existing home.

Location - Many new developments are built further from amenities, like schools, grocery stores, business districts, and shopping centres. And if you're one of the first to move in, you'll be signing up to live in a construction zone for the next few years.

If you're looking for a mature, tree-lined neighborhood with a well-established community, you may want to forgo a new development. Though, an infill property could be a possibility with the right lot!

Less Charm & Space - Often, new homes have less architectural detail and charm than many older homes. Most older homes are typically built on larger lots than new builds. If a big backyard and lots of space between your house and the next-door neighbor are important to you, you may not find it with a new construction home.

No Chance for Sweat Equity - Often, the exciting thing about finding a great deal on an older fixer-upper is the chance for homeowners to take on some DIY projects and add some value to the house. Taking down a wall to open up the floor plan or adding an en-suite bathroom can really increase the value of a home.

Landscaping - Unless you're willing to pay the builder another upgrade fee to include the landscaping in the build, you will likely be looking at needing to install the fencing and landscaping and potentially even the driveway yourself.  

While it may seem like a new build is an ideal choice, there are many lifestyle factors to consider before buying a home. After all, you're not just buying a house; you're buying a home and a neighborhood! Contact me today to start your home search. I will work hard to find you the home that checks most, if not all, of your boxes without the heavy price tag!

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