Better To Buy A New Home Or Pre-Existing Home

Q: My fiance’ and I are looking for our first home. Do you think it’s better to buy a recently built home or an older home? Candace, Fair Lawn, NJ

A: Right now about ⅓ of homes for sale in the US are recently built. There are pros and cons to buying a recently constructed home versus buying an existing home. The benefits of buying a newly constructed home include the fact that newly constructed homes rarely require repairs or renovations and also normally include builder warranties which are protection from defects in workmanship. Also, new-construction homes may be customizable–as a buyer, you may be able to choose the colors, finishes, and fixtures in a newly constructed home you buy. In addition, your financing options as a buyer for a new-construction home may be more favorable because many builders will help buy down your mortgage rate and offer extended rate locks.

While new-construction homes offer some advantages, there are disadvantages including the fact that newly constructed homes tend to be more expensive than pre-existing homes. New homes also take time to build and there’s no guarantee when a new home will be completed so a buyer may have to wait. Although this varies, newly constructed homes often have higher property taxes than pre-existing homes.

Lastly, builder contracts tend to be different than standard purchase agreements for pre-existing homes so always read any contract thoroughly BEFORE you sign it. Thanks for your question, Candace.

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