Many homebuyers—whether first-time homebuyers or repeat buyers—are now being enticed back into the real estate market, thanks to historically-low interest rates, exceptional affordability, and the strength of real estate as long term investment. Many of these buyers are seriously considering purchasing existing homes because of their low price point. Yet while the price may seem right, there are a number of ways in which existing homes—particularly distressed properties—pale in comparison to new homes. We may be biased, but after considering the points below, we think you’ll agree that existing homes may not be the “deal” that they initially seem to be.
Do you know what you’re getting? An existing home is like a question mark—you can never be entirely sure about what you’re getting when you take full possession. With many existing homes, issues may extend deep into the structural heart of the home, meaning that a nasty surprise could be waiting for you when a routine repair encounters an unsound (and possibly unsafe) state of affairs. With new homes, what you see is what you get. You’re starting from the very beginning, so there’s no question about whether the appliances, wiring, HVAC or roof will last. Which means that you won’t have to worry ceaselessly about the potential repairs that may be just around the corner, ready to exhaust your morale and drain your bank account.
Are you covered? With existing homes, you buy what you buy, and if something goes awry on your watch, it’s your responsibility to fix it. Period. If something in your new home goes wrong, you’re under warranty! At LGI Homes each home we build is covered by ten-year structural and two-year mechanical warranties, because we stand by the quality of our construction, the durability of our installed appliances, and the ability of our workers. This means that you’re protected against a financial blow should something go wrong in your home, not just for days but for years after you move in. Trying getting confident coverage like that in an existing home!
Are you up-to-date and up-to-code? Home construction, like everything else in our fast-paced world, has advanced considerably over the years, and even a decade’s difference between construction dates can reveal huge changes in the way in which two homes may have been built. With an existing home, you’re investing in (and likely living in) a home built with methods and technologies that are sub-standard to what is being used today. New homes are more energy-efficient, are easier on the environment, are regulated against the use of potentially toxic substances like lead or asbestos, and having plumbing and electrical systems designed to the latest and safest code specifications. With existing homes, you simply can’t be sure, and the expense of rectifying outdated infrastructure can cost you thousands.
Are distressed properties and existing homes a great deal? Not necessarily. If you factor in the liabilities, uncertainty and potential expenses attendant to them, it becomes clear that new homes, despite an ever-so-slightly higher purchase price, can actually save you lots of time, money and anxiety over the longer term.