Remodeled Verses New Construction
Many people that are ready to enter the world of home ownership, may think they have 2 options: New Construction or Fixer Upper! It's important to also consider a third option...Newly Renovated!
Here at Fresh Start Homes Michigan, we pride ourselves in giving our clients a new home experience in a pre-owned home. Ultimately its important to make sure you choose the best option for you. At Fresh Start Homes we can help you explore your options and help you to find your next place to call home that fits your needs. For now, let's go through some of the Pros and Cons of each Option!
What exactly constitutes a new home? A new home can range anywhere from finding a plot of land and working to designing your home from start to finish to finding a lot in a new home development with designs to choose from, to finding a new construction home that is complete or almost complete and ready for you to move in such as a model home in a new home development.
PROS of a New Home
A huge benefit to a newly constructed home is that the home is going to be more efficient than an existing home. One reason for this is the recommendations in 2017 for say insulation are much different than they were in 1940! The better the insulation, the lower the cooling ad heating bills. Other potential components may include Appliances, Windows, Heating Systems and AC's. However, as much as it is almost certain that a new home will out preform an existing home in efficiency, it is important to do your homework. Although recommendations and regulations have been greatly improved, there are still a wide variety in available materials and options.
If building from the start, one huge pro is the ability to customize the home to your wants and needs. Existing homes come as they are and can be expensive to make changes that you want such as open floor plans or a redesigned kitchen layout. In addition to choosing the layout, you can choose the materials such as cabinets, flooring and countertops.
LOCATION LOCATION LOCATION
Often times new neighborhoods are being developed in areas that are up and coming. Or perhaps your wanting new and modern living in a country setting, you can find a lot that fits your needs and build from there.
FEWER POTENTIAL HEALTH HAZARDS
Newly built homes have drastically fewer potential for health hazards. Many hazards can be very scary and go undiscovered for many years in existing homes. For example, homes built prior to 1978 are almost certain to contain lead paint which can be hazardous if ingested. Other potential risks include Mold, Radon, Moisture and Asbestos.
CONS of a New Home
Depending on the stage of the new development, it's possible you could be dealing with future construction for quite some time. if your building new in a rural area but not a new development, you have no idea what could eventually be built in that beautiful wooded view you currently have.
There are several types of value when discussing real estate; appraised value, market value, resale value and assessed value. It's important to understand how each may affect you. It's also good to consider the timeframe that you plan to live in the home. For the most part, the resale value of a new construction home is less than the cost of building it. Recently I had a client moving to Michigan from the East Coast. When they sold their home on the East Coast that they had built just 7 years ago for about $475,000, they listed it for $399,900. It's important to understand that unless you plan to stay in your new home for an extended amount of time, it I unlikely you will recoup the entire cost of building the home when it comes time to sell. My client had planned to stay in their home much longer, but unexpectedly got a job offer they couldn't pass up.
The build time can vary greatly from builder to builder, on average you can expect a new home to take 120-150 days. However the time period can be effected by many things that are out of the control of the builder. Weather can certainly add time to the number of days it takes to build a new home, as can your local municipality when trying to obtain permits. In addition, keep in mind, each and every change you make during the process, will likely add time and cost!
Excavation costs can often times cause additional costs during construction. A contractor can not always predict what they may find when they break ground, if the excavation takes longer than anticipated and takes more labor hours than planned, you can bet that expense will be passed onto you. When building new construction, you should always expect additional expenses.
HIGHER UPFRONT COSTS
New construction will almost always result in much larger upfront costs for a buyer. Make sure to understand and discuss all upfront costs involved before signing any contracts.
An existing home basically means a home that has been occupied previously, whether it was built in 1905 or it is 2 years old.
PROS of an Existing Home
When buying an existing home it is much easier to review the neighborhood, such as quality of the local schools, noise levels, crime rate, cell phone and internet reception/connections. It's much easier to assess these items in an established neighborhood than an up and coming neighborhood that isn't established yet. In addition an established neighborhood is much likelier to offer a tree lined, mature and quiet neighborhood.
CHARM & CLASSIC CHARATERISTICS
Charm can certainly be added to new construction, but it's going to come with a hefty price tag. Existing homes can be found that offer hardwood flooring, leaded glass, intricate trim and other characteristics without a hefty price tag.
QUICKER CLOSINGS & POSSESSION
When buying an existing home you can usually expect to take possession 30-60 days once an offer is accepted. On the other hand a new home will range between 120-150 days on average.
When buying an existing home, in most real estate markets you will be able to get more for your money. Many prime locations are already built up, so an existing home may be your only option in certain school districts or with beautiful views of the lake. In addition you will likely be able to get more upgrades, such as granite countertops or hardwood floors when buying an existing home on a $200,000 budget than a new home on a $200,000 budget. You are also likely to get extra square footage for your money.
CONS of an Existing Home
UPGRADE & RENOVATION EXPENSES AND HEADACHES
If you choose to buy an existing home you will likely have changes you plan to make. Renovations while living in a home can be very stressful and expensive. Sometimes when you start renovating you discover additional things that have to be updated in order to complete the changes you planned on making.
NOT GETTING EXACTLY WHAT YOU WANT
One obvious negative with buying an existing home is that you are likely making compromises on things you had hoped for in your new home. Whether its the floor plan, layout of the kitchen or the size of a closet or bedroom. It's a good idea to have a list of "must haves" and "would likes" before looking for a house. During the buying process you may even update the list, but this way you have a visual of what your wants and needs are and you can review the list before making an offer. You can make the decision then if the updated kitchen is worth sacrificing the basement or the larger bedrooms are more important than a 3rd bathroom.
NEW HOME EXPERIENCE, PREOWNED HOMES
A third option to consider is finding homes that have been purchased and renovated. At Fresh Start Homes we buy homes in various areas and our construction team reviews each home and determines what needs updated and replaced.
PROS of a Renovate Preowned Home
BIG TICKET ITEMS REPLACED OR CERITFIED
Our construction time reviews big ticket items on each house, such as the roof, AC (when applicable), furnace, water heater and more. Depending on their evaluation they either certify or replace the items.
Each home is renovated form top to bottom. Flooring is either cleaned or replaced. All rooms are typically painted with neutral two toned paint. Cabinets, flooring and countertops are updated or replaced in the kitchen and bathrooms.
YOU CAN HAVE A SAY
Depending on the stage of the renovation of the home, you may be able to have a say in the colors of cabinets and paint colors! We have homes at various stages in various locations, so we can likely find one that meets your needs and timeframe. In addition many of our homes can be sold at various stages if you are hoping to do some of the renovations yourself!
TIMEFRAME AND COST
Some homes need extensive renovations, from taking down walls to replacing the roof, but many need light renovations. The benefit is that the homes typically do not take as long as a new construction home, but they are move in ready unlike many existing homes! The cost of the renovations is built into your purchase price, rather than buying an existing home and needing to have additional money to paint, and update things to meet your needs!
The pros and cons discussed are meant to help you decide which option fits you best! Buying a new home, whether it is new construction, existing or a renovated existing home is a very exciting time! Make sure to do your research, ask questions and find a realtor that you are comfortable with and is experienced and knowledgeable. At Fresh Start Homes Michigan we are experienced in all three types of home purchasing. Kim Agemy has worked in new construction neighborhoods for companies such as Pulte Homes for 20+ years, she has sold existing real estate for 20+ years as well and she works with our clients buying our fully renovated existing homes. If you have a question, Kim will be able to help you!