Should I Buy New or Used?
New homes are everywhere. There’s literally dozens of new home builders from across the country competing for your business with a boatload of options trying to woo you into their comforting arms. Their ads are flashy; their options are slick; but are they the best choice for you?
From the get go, there’s a huge consideration that limits almost every homeowner from the start: price! The price of a new home is likely going to be less negotiable than a used home. That’s how the giant homebuilders operate; there’s not much getting around that.
The trick is to take advantage of the incentives that they offer that can work in your favor.
Don’t let the pushy sales tactics get the better of you. New Home Sales Counselors are there to make the sale, and I’m going to teach you how to take full advantage of that.
- Do Your Homework — This is the most important part of your journey and it begins at home. Whether you’re looking at that perfect starter home or the million dollar luxury home on a golf course, a little bit of research goes a long way. Going in armed with a gameplan gives your wallet a huge advantage. Sales people have a job, too. Making their job easier makes the whole sales process that much sweeter.
- Money Talks — Cash buyers have the upper hand. Simple, right? Walk in confidently if you’re one of the lucky homebuyers out there with cash in hand. Sales people have incentives for cash buyers because they don’t have to spend their weeks dealing with appraiser, lenders, and the bureaucracy in between. Upper managers are much more likely to knock a nice chunk off that price for cash buyers.
- Use Your Time Wisely — Lets say you’ve done your research. You know every little detail on the home you’re looking for. Make your life much simpler and don’t go out window shopping at every model you can. Chances are, this is a waste of time for everyone. The best use of everyones time is to go out when you’re truly ready to buy. That way, when you walk into that perfect builder one weekend, you can leverage all of your knowledge against them and walk out with the best deal possible.
- It’s That Time of Year — Every public corporation has a time of year they close out their books and report to investors. This is called their “fiscal year end,” it usually happens around September to November. Use this time to your advantage when you’re ready to buy a home. Managers have a lot riding on these sales and they’ll be willing to go light years beyond the norm to make the sale.
- Products, Products, Products — A huge part of going to the negotiation table is coming armed with knowledge. If your dream home has four beds, three baths, a patio, granite, and stainless steel in the kitchen, walk into that perfect builder and know your options. Let’s say DR Horton has the perfect floorplan on the perfect lot but you know Standard Pacific has the same option for $5,000 less. Your best chance of coming out with the best experience possible is to know the competition. Know every alternative around you; leverage that knowledge when it comes to negotiation time. This is huge. Know you can walk in with the ability to walk out the second the deal isn’t so sweet anymore. With this knowledge in your negotiation arsenal, you’ll be on a level playing field with the salesperson and you’ll likely come out with a much sweeter deal.
New homes come with plenty of advantages. Namely, warranty warranty warranty. Nothing says comfort like peace of mind for the next 10–15 years. This will, of course, vary from builder to builder. Make it a point to pick apart their warranties for specifics on mechanical, electric, and structural specifics.
Most builders allow some level of customization in their build process. This gives you the power to pick out certain fixtures, paint colors, and layouts that suit your taste. Some builders like Beazer Homes allow you changes the floorpan of the home without any extra costs. Don’t get caught up in the endless possibilities of the process! Go in armed with enough knowledge to make a decisive move once that perfect option comes along.
Energy efficiency has made some incredible leaps over the past twenty years. Most new homes come with a fancy trademarked label for their energy efficiency benefits. A few key metrics to look out for: insulation, heated space, and Energy Star®.
Many builders stuff their walls with nonsense. Others choose to do educate their buyers on the “R” rating of the insulation. This is essentially how well the space is insulated, the higher the better. A good wall rating is around R-18 and attic spaces should sit in the high “R-30s.”
Ask your salesperson how they run their ductwork, whether it’s in a heated and cooled space or not. If it isn’t, ask why. A good builder will insulate the space your ducts are in — it’s a huge energy saver.
The EPA has come up with the Energy Star® certification for the most energy efficient builders. Lending their name to the builder gives you peace of mind that they’re leading the industry in energy efficiency. Homes built today are built to much more stringent building codes than anything built in the past. Green building is the new trend among the big builders. New homes will typically have a better air filtration system , allowing much less pollen/allergens into the house, among many other features. Allergy sufferers rejoice!
Used Homes: A Whole New World
“Used Homes” sound so dirty. Call them resales, call them used, call them whatever you’d like except for dirty. Resales make up a big chunk of the market. You’ll probably be looking at more than one. Here are a few things to consider:
- Availability and choices-Plenty of choices on the market and much more location variety. Resale homes give you the benefit of searching through parts of town that probably wouldn’t come up in a new home search because newer homes generally have to go further from metro centers to find land to build on. Older homes give you the benefit of working in an area much closer to the city!
- Urgency-When you’re looking at a resale, chances are someone lives there. That person probably has a reason for selling their home. Buyers should go into that situation knowing that the seller is probably equally incentivized to sell as you are to buy! Take advantage of this in your negotiations and walk away with a much better deal.
- Knowledge is Power- You’ll likely get a much closer look at the history of the home with disclosures and inspections. Knowing if it has any problems with mechanical, plumbing, or foundation could be a huge bargaining chip in your negotiations if you’re willing to get your hands a little dirty on the back end. Don’t be afraid to pour over the home inspections looking for any sign of trouble. Everyone involved should know the hidden secrets of an older home.
- Charm- Older homes have the benefit of standing the test of time and gaining a certain glow that time bestows. Older architectural designs often come out as modern triumphs. Look back the 1920’s Art Deco era, some of the most phenomenal structural hits happened in a few short decades! Older homes are no exception. That antique design could be a huge opportunity to build on.
- Neighborhood- As oppossed to many newer developments, older neighborhoods tend to be more established with better school zones and fully developed amenities. The number one complaint I heard in the new home business from buyers was their impatience to wait on schools and amenities to pop up. Not having a Publix or Wal-Mart a few minutes drive from your new house could be a bigger nuisance than you first think.
- Opportunity to Renovate- Older homes may carry the dust of many years of neglect. No worries! With a trusted contractor or some sweat equity, you can turn that old home into a sparkling gem.
Go into the hunt with a tempered outlook. Some older homes will have issues that will require a renovation budget. On the plus side, that renovation budget could lead a highly customized house. Think about resale houses as a canvas that gives you the ability to create your very own masterpiece.
Wether you choose to buy new or used, buying a home is hugely important to your freedom. Both options offer their own pros and cons, something that needs to be thought long an hard about. Either way, buying a home is a huge milestone in anyones life!