According to the National Association of Realtors, 56% of first-time home buyers believed that finding the right home was the most challenging part of their purchase.
Buyers will need to decide whether they are interested in a pre-owned home or a new one. While both have their pros and cons, new homes often appeal to those seeking the ability to make customizations.
Five Pros of New Homes
#1. New homes are state-of-the-art
New homes are built according to the latest quality, workmanship, and building standards. They are typically eco-smart, healthier, and leverage new technologies. For example, most new builds incorporate energy-efficient windows, low-VOC paints, and other eco-friendly building materials. This can translate to lower energy costs and a healthier environment for new homeowners.
#2. New homes are easier to take care of
New homes typically require less maintenance and are ready to move in without needing any renovations or repairs — thus reducing the associated costs for new homeowners. In most cases, the builder also includes a home warranty, giving additional peace of mind.
#3. New homes invite preferred lender benefits
Builders often work with preferred lenders that offer incentives to buyers purchasing in the new development. These incentives can include prepaid homeowner’s association dues, closing cost assistance, and interest rate buydowns. While buyers should always shop their mortgage to make sure they’re getting the best deal, preferred lender incentives can result in significant savings.
#4. New homes offer more choice
New construction homes offer buyers a wealth of choice. From selecting the builder to picking the neighborhood, lot, floor plan, and upgrades — there are multiple customization options that come with a new home. This can be particularly attractive to buyers who have a specific aesthetic in mind.
#5. Buying a new home has a longer timeline
Since it takes time to build a home, purchasing new construction can have a longer timeline than a traditional real estate purchase. This can benefit buyers who need to sell their existing home, as it creates a buffer for them to make any required repairs, list their home, find a buyer, and complete the sale.
Five Cons of New Homes
Buying a new construction home is not for everyone. Here are some reasons why home buyers choose pre-owned homes.
#1. Construction disturbances may occur
If you move into a new neighborhood that’s likely to be in development for an extended period, you need to consider the construction-related disturbances. Noise, mess, and building activity will be present in your community until it’s complete.
#2. New builds don’t always have set timelines
The move-in date is not always certain when building a home. When delays in the construction process occur, your move-in date can get pushed out — so you’ll need the ability to be flexible. However, buyers looking for move-in-ready homes (or those close to completion) may not face these obstacles.
#3. It’s difficult to negotiate price on new homes
Builders set their base price according to numerous factors. It is unlikely that a builder would allow for price negotiations unless the home has been sitting vacant for a certain period of time.
Rather than focusing on price, buyers will likely see more success in requesting upgrades. This is an excellent reason to partner with a real estate agent who has experience negotiating the purchase of new construction homes.
#4. Small-sized lots are common
When builders develop a master-planned community, they typically divide the area into smaller lot sizes versus the larger ones you may see in more rural areas. In fact, according to the Census Bureau, the average lot size for new construction homes is roughly 9,000 square feet (or 0.2 acres). So it’s something to consider if you need a bit more space.
#5. New homes can be expensive
Generally speaking, new construction homes cost more than pre-owned ones. For example, the average price of a new-build single-family home in March 2021 was $397,800, while the average existing single-family home was $329,100.
It’s also important to note that the price of new homes can increase quickly depending on the add-ons and upgrades you choose. New home buyers should be mindful of these costs as they move through the process.
Considerations When Shopping New Homes
Keep these additional considerations in mind if you plan to shop for new construction homes.
- Find a mortgage lender who has experience with new construction homes.
- Work with a real estate agent who specializes in purchasing new construction.
- Look into the project history and reputation of the developers and builders.
- Do not forget to consider the timeline.
There is no shortage of new homes on the market. In fact, in January 2021, 307,000 new construction homes were for sale and, according to the National Association of Home Builders, there is currently a four-month supply of new construction homes available across the nation.
If you’re interested in buying a new construction home, explore our listing site and add the “new construction” filter to see new builds on the market near you.
