Should I Buy A New Home Or A Resale?
Updated: Feb 25, 2022
Firstly, let's talk about price.
Different real estate markets will give you different feedback as to what you need to offer to get the home, whether this is below, at, or above the list price. We really needed to stay ahead of the data and keep busy working in the field to keep up to date with what an offer should look like to successfully purchase a resale.
When you buy a new home, in most cases the price is fairly transparent and you will be able to purchase the home without having to bid over the list price. It's nice not to have to get involved in a bidding war when it comes to buying your home.
What about warranty?
Another perk when it comes to buying a new home is warranty. This means that if you experience problems with the home, the builder will come and fix the issues while the warranty is still in place. Therefore, it's important to ask your realtor to find out how long the builder's warranty will be for and what it actually covers.
How about lender credits?
Another perk of buying a new home is that you can often get buyer closing cost credits from the builder if you use their in-house lender. It's important to compare the rates and loan fees of the in-house lender and compare to your own loan agent's offering, then to assess the costs of both to ascertain what will be the more affordable option for you in the long term.
What are the cons of buying a new home?
The biggest benefit of buying a new home is that it is just that, NEW! However, there are a few cons to consider.
Firstly, you will often need to pay an ongoing additional fee called Home Owner's Association Fees (HOA). This covers the upkeep and maintenance of the community you live in and will vary from community to community.
When you buy a resale, you can choose whether to buy a home in an HOA community or not. You may be able to get a beautiful neighborhood without having to pay HOA. Some new developments do not have HOA, which is a nice bonus if this is the case in your area!
Mello Roos tax is another additional cost that is often applied by the government to a new community. This is paid to cover infra-structure expenses and is also an ongoing cost for the duration of owning the property.
Lastly, with a new home you will be getting a fairly cookie cutter look, which means it may not have the same character that an older home may have. However, you will be getting that fresh new look and feel of not only your own home, but also the community in which it is in.
If you are planning to buy a home in the Bay Area and would like assistance, I would love to hear from you.
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