Financial Benefits of Buying a New Construction Home
Being the first person to own your home is an attractive idea, but does it make the most financial sense? At a glance it would seem that buying a resale home at a cheaper price would be easier on the bank account, but it’s important not to overlook the financial benefits of buying new. At Baywood Greens, we offer both new construction and re-sale homes, and both offer unique benefits. But depending on your situation, new construction homes may make more sense financially.
Here’s a quick rundown on why buying a new construction home may be the best financial decision.
The most obvious point is that a new home will be built with up-to-date materials and with the latest energy efficiency practices. This will not only save on your heating and cooling costs, but will save you on replacement costs shortly after move in.
Who knows when you’ll need or want to move again, but it’s important to consider that a 10-year-old home will have a better resale value than a 30-year-old home. Even if you’re planning on this being your last home, the resale value will impact your family after you’re gone.
Better Financing Options
You can often get more customized financing when buying a new home through a builder than when you buy resale. Homeowners are sometimes nice enough to contribute to settlement charges, but a builder who has a mortgage subsidiary has a lot more flexibility when creating your final loan to fit your exact needs.
Built-in Safety Features
This isn’t so much a money saving features as it is a “help you sleep at night” feature, but still worth mentioning. Newly built homes use fire retardant materials in things like insulation and carpeting. In addition, fire alarms and carbon monoxide detectors are built in to the house, so you won’t have to deal with faulty battery-powered detectors.
Priced Closer to Market Value
Builders have a much different strategy behind pricing a home than a homeowner does. The builder takes into account the cost to build the home, the land and their profit margin. And of course that price has to fit into the real market value or they simply wouldn’t sell any homes.
On the resale side of things, the homeowner is concerned with how much they still owe, how much their next home is going to cost, and of course the perceived value of the home that they’ve lived in and loved for years. Not to mention the fact that many homeowners who’ve overpaid in the past are looking to make up some of that loss on the sale—passing that expense onto the next buyer.
First Year Tax Loophole
Something you might not know about property taxes is the current year taxes are based on the value of your home the previous year. If you buy a new construction home the value of the home was probably not much seeing how it was still an empty plot of land. Savings of $100 - $250 a month for the first 18 months are not uncommon according to Zillow.com.
The Unadvertised Expense of Buying Resale Homes
A resale home might cost less, but will it save you money? In a few years you’ll end up replacing the roof, furnace or some other major item. All part of owning a home, but it’ll be at least 10 years in a new home before you have to worry about the big expenses.
But in any given resale home you may have to replace one or more of these in the first 5 years:
- Central air system
- Hot water heater
- Roof shingles
- Exterior/interior paint
- Kitchen remodel
- Bath remodel
- Garage doors
Anyone who has bought a home knows that price isn’t the only deciding factor. The house has to give you that special feeling. With all the options available in new construction homes today, you’ll be sure to find what your looking for and still make a sound financial decision. And with all of the options for a new home at Baywood Greens, you'll be sure to find the resort community home you've always dreamed of!
SOURCE: Zillow, New Home Sourec