Should You Buy A New Home Or A Pre-Owned Home?
Entering the housing market can be an exciting, although overwhelming, experience. When you really sit down and think about it, there are one million things that could go wrong. There are millions of houses for sale, and your job is to pick the perfect one for you. If you make the wrong choice, no big deal, right? Other than the half a million dollars you had to commit to buy the house, that is!
Many homebuyers who come to this mental crossroads draw the conclusion that the best option for them might actually be to not look at any of those millions of houses at all. While there are millions of houses ready to be lived in, these homebuyers draw the conclusion that not a single one of them can possibly be their perfect dream house. Instead of exploring the housing market, they decide to just build one from the ground up.
Really, there is nothing wrong with this approach. Having a new home built is a great option for many people, and if this is what you choose, you should be proud to own your new home! There is something really special about having a place that is and has always been yours, and knowing that nobody has lived in the house except for you. There are, however, advantages and disadvantages to having a new home built, and it is important that you are at least aware of them before you make the commitment and begin construction.
This post is going to lay out the advantages and disadvantages of buying a new home instead of a preowned home. Once that groundwork has been laid, this post will continue with a look at what type of people are generally a better fit for both new and preowned homes. In top of that, this post is going to consider the fact that not all-preowned homes are equal. To address this, we will actually break them out into old preowned houses and young preowned houses. If you have any questions at the end of the post, be sure to reach out!
Advantages Of Buying A New House
1. You Are In Charge Of The Design and Construction
This may be the single greatest advantage in this entire post. There truly is nothing like designing your own home from the ground up and watching it as it gets built. When you buy a brand-new home, you decide what colors the walls should be, what kind of flooring there should be, the layout of the house, and more. Having that level of control over the space that you live in is only possible in a brand-new house, and it is something that truly does have a lot of value. While it is not a dealbreaker when you can’t have this level of control, having it is definitely a really nice perk. It makes you fall even more in love with your home when you know that you designed it!
2. Reduced Maintenance And Repair Costs
New homes are exactly that: new. New things are much less likely to break than old things. That is just how the world works! Each component of a house has its own expected lifespan. Rooves, for example, tend to last for anywhere from ten to twenty years. When you buy a new home, it means that you are buying a piece of property with all brand-new components that should not be anywhere near in need of replacement. On top of that, many components of new houses come with specified warranties, so if your roof does cave in after just a couple of years, the homebuilder might replace it for you free of charge.
3. New Homes Are Usually Larger
In today’s day and age, we have really gotten accustomed to having more. Everything always seems to get bigger and better. Newly built homes follow that trend to a T. When you have a new home built, dollar for dollar it is more likely to be bigger than an older house. While this all boils down to personal preference, more space means having more ability to do the things you want to do and host the people that you want to host. Buying a new house gives you more freedom to forge you future how you want to, not just within the confines of your brick colonial home.
4. Save Money On Utility Bills
The final great advantage of building a brand-new home instead of buying a preowned home is that new homes tend to be much more energy-efficient. From windows that more effectively maintain temperature to more energy-efficient appliances, buying a new home typically means you can expect to spend much less on energy than you would in an older, preowned home. It is sort of like how it works in cars! New cars manage to get upwards of 40 miles per gallon, while a 2005 is lucky if it can even break 20 miles per gallon.
Disadvantages Of Buying A New House
1. New Home Prices Can Be Very High
To be fair, this is not really much of a shocker. New is always more expensive than used, all else equal. Having a new home built usually means you will pay more – a lot more – for the house than you would for a preowned one. Considering that all of the materials are being delivered to the worksite and coming straight from the factory, the “fresh house scent” comes with a pretty steep price tag. Those amenities are, however, often backed by guarantees and warranties, and they can make the high price tag worth it.
2. New Homes Can Take A Long Time To Build
The second main drawback to having a new house built is that you need to have some time on your hands. New houses take several months to build, meaning that if you need to move in the very near future, this option likely will not work for you. While having the liberty to design and build your own house is very exciting and alluring, waiting for a year can be a bit inconvenient, if even doable. If you are relocating for work or have a lease expiring soon, this is simply not an option for you. If you have more time on your hands, this might matter a bit less.
3. New Properties Tend To Have Smaller Yards
We have mentioned the concepts of supply and demand in some of our most recent posts, and those concepts sort of apply here as well. Land is not unlimited. There is only so much land that can be built. In the past, properties used to come with immense acreage, as there was simply so much available. Now, the price of land has risen substantially and the size of the yard in a newly built house tends to be much smaller as a result. You can still have a yard, but the idea of having a few acres of land for the puppy to run on is a bit more unattainable now if you want to buy a new house. This is also because most new houses tend to come in housing developments these days, and the lots in a housing development tend to already be owned by a developer, already be a certain size, and tend to be less than an acre.
4. New Houses Tend To Be Located In Developments
On that note, the final item on our list of the biggest disadvantages of building your own new home is that new homes tend to be built in housing developments. For many people, this is not a disadvantage at all. Housing developments offer great security, peace and quiet, and community. However, what housing developments often lack is proximity to walkable areas. Housing developments exist in places where developers can buy hundreds of acres of land to plop down a community, and there don’t tend to be hundreds of acres available downtown in any city anywhere. The only example I can think of is Central Park in New York City, which would probably cost a trillion dollars to buy out. As a result, housing developments tend to get build in less convenient, less proximal areas. If you want a detached feel, this is great. However, if you want to be able to walk to coffee shops, grocery stores, parks, and city hall, you might prefer looking elsewhere.
Advantages Of Buying An Old, Preowned House
1. The House Has Character
When you buy an old house, one of its best features likely is its character. Houses that are old, while they may come with some problems, carry a level of charm that is hard to match with new construction. Especially as they are often located downtown in cities, old homes can blend the neighborhood with unique architectural style, leaving you with something that is yours and yours alone. In the age of cookie cutter homes, owning a downtown Victorian residence is extremely appealing to many people, and while things may be dated on the inside, they can easily be replaced and upgraded.
2. The House’s Value Curve Is In A Mature Phase
Property values change over time, but they do tend to follow several different value curves. A value curve is basically the pattern that a home’s value with follow as time passes. At first, a home is worth its selling price. For a while, that value will rise alongside inflation. Eventually, that value starts to decrease as the house ages. With old, classic homes, they are already old enough to where they’ve worked their way through the value curves and are now considered to be more of an antique, which adds value. As they are in a mature phase, you can normally expect that with good upkeep, they will not lose any value. This works just like antique cars, as for the first twenty years they are just an outdated, used car, but eventually, if kept in good condition they become collector’s items worth much more than their initial sale price.
3. The House (And Its Value And Neighborhood) Are Established
Similar to the second point on this list, as the house is mature it has grown with the people and places around it. Houses grow legacies right along with the other people and houses on their street, and these legacies stay intact. Just like the house’s value tends to be locked in after a certain time, its significance, charm, and legacy tend to too.
4. Old, Preowned Houses Tend to be Cheaper
This is a bit fluid, as really nice antique houses will not be cheap. However, most homes built in the 1960s are going to come at a much more affordable price point than homes built in the 2000’s, even if they are constructed better than the modern ones. If you are looking for something that is attainable from a cost perspective, looking at older, preowned houses might be the best place to start.
Disadvantages Of Buying An Old, Preowned House
1. Maintenance and Utility Costs are Higher In Old Houses
Old things break more. That is just a fact of life. As old houses have been around for 40+ years, they start to develop more problems that need attention. These problems can be faulty breakers and circuitry, roof leaks, plumbing issues, appliances that need replacing, windows that don’t insulate very well, and more. These repairs tend to add up, and in older house they are also much more frequent. Old houses are also where extremely expensive repairs – like cracked foundations – are likely to occur. These are the types of things that can really break the bank.
2. Old Houses Are Typically Smaller
I mentioned earlier that we live in a supersized day and age, but that was not always the case. Houses built in the 1960’s tend to have smaller rooms, less bedrooms, and bigger yards. People back then just didn’t demand nearly as much space as they do today, and children sharing rooms was much more common. Houses built in the 2000’s tend to have big bedrooms (and lots of them) and small yards. It is just how styles and preferences have changed over time. For many people, this isn’t an issue. However, if you need more space, a 1960’s rancher is probably not the right type of home for you.
3. Fixtures And Materials May Be Outdated And Need Replacing
In the past several decades, people have made huge leaps in terms of quality of materials and engineering. Houses built in the 1960’s often have less trustworthy electrical systems, often use materials that nowadays we see as very, very toxic (like asbestos) and often used light fixtures and appliances that are considered energy guzzlers in this day and age. Moving into an old home often means replacing any tiles that may be filled with asbestos, running some new wiring, and replacing many of the light fixtures and appliances both for fire safety reasons and for energy saving reasons.
4. Old Houses May Have Dated Finishes and Designs
The final item on this list is simply that old houses tend to be dated on the inside. From bright colors, to wallpaper, to odd types of carpet, old houses are often in need of a real facelift if you want them to be stylish. While giving a house a facelift isn’t horribly expensive, it is still more money that you might need to budget on top of the price you pay for the house. Carpeting isn’t too expensive, but it is something that you definitely cannot do on your own. Painting the entire house is something you can do on your own, but it takes a lot of time, effort, and a fair amount of money to do.
Advantages of Buying A Preowned, Relatively Young House
1. More Affordable Prices Than New Homes
In many ways, buying a preowned, relatively new house can be a sweet spot for buyers. The house is fairly new, which means that you will have most of the modern amenities that are built into homes. If you buy a 10-year-old house today, there is a good chance it may have USB outlets, light dimmers, and a Bluetooth thermostat. Those are all cool perks to have in a home! However, one of the biggest advantages is that they cost just a bit less than a brand-new home. So, if you opt for a house that has been recently built but had another owner for a few years, you get all the same modern conveniences for a slightly lower price tag. If budget is an issue, this can be a great compromise.
2. If Inspected Properly, There Will Be Low Maintenance Costs
As a recently built, preowned house has not had all that much time to deteriorate, many of the most expensive fixes should still have a long time before they need attention. The foundation should still be great, the roof should have a good amount of time left, and the electrical and plumbing systems should all be squared away and good to go. If your inspection goes well and there are no impending fixes, looking at young, preowned houses can be one of the most economical choices that you can make when looking for a house.
Disadvantages Of Buying A Preowned, Relatively Young House
1. The Price Is Not That Much Lower Than A New Home
While the price of a young, preowned house is not the same as an equally built, brand-new home, it isn’t that far off. After all, you are still buying a comparable house that really isn’t dated in any way. When you opt for a home in this category, you save a few thousand dollars but lose the autonomy that comes with having your own house built and the sense of security that comes with knowing you are the only one to have lived in your home.
2. If It Needs Repairs, They Might Be Costly
One of the most important parts of buying any preowned home is having it inspected, as a good inspection can save you thousands of dollars. However, inspections are done by humans, and humans miss things. If your inspector misses a big thing that needs to be repaired and you buy the house, there is a good chance that the repair is going to be costly. In a ten-year-old house, there aren’t too many things that should be in need of routine maintenance or repair. So, if you have an issue, it is likely one that isn’t supposed to happen, and these are often the most expensive repairs.
Thanks for reading our post about the advantages and disadvantages of buying both new and preowned homes. We hope that this post has been helpful and informative as you go through the home buying or home selling process. There is so much to understand when you look into buying or selling a home and making a misstep can cost you thousands of dollars. Knowing at least what type of house you ought to be looking at makes starting the house hunting process much easier, and it can save you a lot of time, too.
If you visit Myrtle Beach or any other place in South Carolina and fall in love, we’re here to help. We at The Boyd Team are committed to helping you find the right property for your needs and dreams. Any question that you have about moving to the area and finding your dream home by the beach is our pleasure to answer. Feel free to send us an email at eddie@boydteam.com or text or call us at (843) 222-8566, and we will get back to you as soon as we can. Being true natives of the Grand Strand and Horry County and with over 25 years of experience in the local real estate market, whether buying or selling, we can help you make your dreams a reality.
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