Is It Better to Buy a New or an Older Home?
New homes tend to cost more than older homes, but the sticker price doesn't tell the whole story. For instance, the price of a new home usually doesn't include window coverings or landscaping, and the flashy upgrades that caught your attention in the model home cost extra. However, new homes are built to current building code requirements, they're energy efficient, and they're free of the deferred maintenance that can result after years of use and neglect.
A well-built new home should be relatively maintenance-free for the first ten years or so. This doesn't mean that you won't have any problems with a brand new home. A new roof can leak if a skylight or vent pipe isn't properly sealed. You should expect there will be a number of little items that need fixing within the first few months of buying a new home.
It's often said that a new home is only as good as its builder. Be sure to investigate the builder carefully before buying one of his or her homes. You're looking for a builder who has a good track record for taking care of problems promptly. Although minor problems are to be expected, you want to find a builder who has a history of building homes that don't develop major problems.
One couple bought a new home in a small development. Soon after moving in, serious problems developed which the builder refused to fix. Windows leaked, the drainage system didn't work properly and water seeped through the exterior walls. Unfortunately, by the time the buyers decided to sue the builder, he was bankrupt.
First Time Tip: Any home you buy, new or old, should be thoroughly inspected by licensed professionals before you complete the purchase. Don't make the mistake of foregoing an inspection just because a home is new. In fact, it's a good idea to have a new home inspected twice: once during construction and again when it's completed.
The big disadvantage of buying an older home is that it may need refurbishing. Although an older home may cost you less than a new home initially, it may end up costing you much more when the expense of updating is taken into account.
To evaluate the true cost of buying an older home, find out the age of the roof, appliances and major systems like plumbing, heating/cooling and electrical. Ask your home inspector to estimate how long each of these items is likely to last. Then get replacement estimates from licensed contractors.
Ask sellers for documentation on any major work they've done to the property. For example, if they put in a new drainage system, ask for copies of the work proposal and the paid invoice. This will be useful when it comes time for you to sell. If the roof was replaced recently, find out if the roofer will extend any remaining warranty to you. Also find out how much the utility bills are in an average summer and winter month.
Older homes require more maintenance than new homes. This takes time and money. However, older homes often have more character and architectural distinctiveness than new homes. Older homes usually have mature landscaping and they are often more conveniently located. Older neighborhoods may also offer better schools. And, while older homes may need updating, they have withstood the test of time which is not the case with new homes.
The Closing: From an investment standpoint, your best choice is either a quality-built new home or an older home that has been meticulously maintained.
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