Let’s be honest, in today’s market, there is a lot to choose from. The resale market consists of many types of transactions including, short sales, foreclosures, REO’s, just to name a few. My biggest piece of advise…. don’t limit yourself to resales!!!
Purchasing a new home from a builder is one of the most overlooked and secure types of real estate transactions in today’s market. The main reason? The average buyer believes that he or she can get a “better deal” on a short sale or foreclosure because they are being sold “under appraised value.” That is possibly true, but at what expense to you? The house is ALWAYS as-is, the closing is NEVER certain, and it will usually take AT LEAST 6 months. You are planning your life, for 6-8 months, around an uncertain investment. For what? To get your home $10-15k under appraised value? A builder will gladly give you that.
5 things that a new home offers, that a resale does not:
1. A warranty- ALL new homes come with a warranty, most for up to 10 years after purchase. This includes, among other things, electrical, plumbing, heating and A/C, and, most of all, structural problems. And the things that may not be covered by the builder ie. appliances, are brand new and covered by the manufactures warranty.
2. Options—- This one is simple. Pick what you like, not what the previous homeowners likes.
3. Closing Costs and Incentives- Builders are in the business of getting homes sold and closed, and that means doing near anything to do so. You MIGHT get some closing costs paid by a resale. But, you WILL get them paid by a builder. They also ALWAYS have some other incentives that they are able to give.
4. Financing Options- Most builders will have their own mortgage company. This is a huge advantage to you! They can often times “buy down” to a lower interest rate, which will lower your monthly payment and/or get you qualified. They know that they aren’t dealing with a bitter seller, that might cause them trouble. THEY ARE THE SELLER! They want to close just as bad a you, and will do anything to do it!
5. A GREAT DEAL- As I said before, they want to sell and close homes. A lot of builders have shareholders that care about CLOSINGS, not necessarily that profitability on each home. Don’t get me wrong, they make money, but they would rather break even and get another closing, rather than get no sale at all. You just have to know where they can bend with their numbers.
Summary: New homes are usually a more sound investment for home buyers. They come with warranties, so no surprises later. The builder will bend over backwards to make sure you close ON TIME. They offer financing options that other banks CAN’T.
Don’t go at this alone, hire an agent with new home experience to help. Builders factor in the fact that they are going to pay a real estate professional on every home, and it is factored in to their annual marketing budget.