Why Buy a New Home v. Resale/Short Sale

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.

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About Doug Metcalf

I have worked for new home builders throughout most of my career and I have a lot of knowledge and expertise to share when helping someone purchase a new home. I have great relationships with several national builders, and I am glad to put those connections to work for my clients. I will negotiate the best prices, the least closing costs, the best upgrades, and more! My service is FREE to all buyers, and my goal is to get you a great home, on YOUR terms, with the least money out of your own pocket!
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