New Home or Resale: Which is the Smarter Investment?

January 6, 2010

When you decide to buy a home—and, incidentally, there are so many reasons to do so now, including the tax credits for first-time and repeat home buyers that expire this April—do you know what you are getting for your money? Are you focusing on purchasing an existing home because you think you can get a better “deal”?

The truth is, the sale price of a resale is often only the beginning. You’ll likely have to invest in repairs—cosmetic or structural. Depending on the age of the house, you might be looking at replacing the roof, flooring, major appliances, furnace, water heater, or other items that last only a finite number of years. What kind of structural repairs are you facing? Do you know the condition of the underlying support system (foundation, beams, etc.)? And how responsible was the previous owner? Did he ignore basic maintenance or perhaps cut corners on repairs?

Once you add up the extra costs associated with bringing a resale up to your standards, you might find yourself regretting that you didn’t opt for a brand new home. Consider these advantages of purchasing a new home:

1. Picture perfect. You’re not at the mercy of the previous owner’s choices. You can choose everything in advance: location, floor plan, windows, trims, flooring, appliances, light fixtures, window treatments, colors, and even the landscaping.

2. Move-in condition. You won’t need to spend time or money on changes and repairs after the sale.

3. Warranties. With a new home, you gain the peace of mind that comes with having everything under warranty: the house itself, as well as the appliances, flooring, and heating and air conditioning systems.

4. Energy efficiency. Starting from the ground up allows you to incorporate energy efficient systems into your home—rather than attempt a retrofit—so you enjoy continued comfort and savings (including a tax credit for owning an energy efficient home).

5. Low maintenance. New homes are built with the latest in technology and materials, designed for greater durability and low maintenance.

We’re in a new decade, with new advances, credits, pricing, and more. There has never been a better time to reap the rewards of a new home!