When buying your dream home for your retirement years it is vital to get the decision right the first time. When you compare the cost of a new home with a resale, the price alone can be misleading. You should factor in other expenses to determine the total cost of ownership so you understand the actual value you’re getting. Your own answers to the new vs. used home question are likely to depend on your lifestyle preferences, financing needs and the priorities you put on features like high energy efficiency, functional arrangements of interior living spaces and your desire, budget and aptitude when it comes to repairs and capital improvements. While both new and resale homes have their advantages, there are some distinct things to consider when deciding why to buy new or not. Here, Tribute Homes will break down the cost differences between buying a new vs. used home.
RESALE HOME COSTS: PROS AND CONS
Choosing a resale home does have some pros when compared to a new one, especially when it comes to living in a more established neighborhood. Here are a few reasons why people prefer existing houses when considering new vs. used homes:
- Having traditional features
- Living in an established neighborhood near other older homes
- Paying less for the home
- Living in a home that has some history
- Living in a home that was built to historical construction standards
- Being able to remodel or take on home-improvement projects
But there are plenty of reasons—specifically financial ones—why resale homes aren’t the best option for many people.
If you care about being “green”—whether to you that means the amount of money you spend on energy bills every month or your concern about the environment—a newly constructed home is usually always the best option. That’s because new homes built today must adhere to far tougher national code standards for energy efficiency than homes built even just a few years back, and that can have a big difference on your monthly utility bills.
Customizing a home is also something that many people find very important in order to meet their specific lifestyle wants and needs. But customizing a used home is going to be much more of a financial and time consuming process than with a new home. If you’re looking to move a wall, add a study, raise ceilings, or enlarge windows then that’s just another reason why to buy new vs. used: it will be much easier to customize living spaces during the construction of a new home than to undertake that process after buying a used home.
Replacement costs are also something to keep in mind when considering new vs. used homes. In a new home, everything is new! But in a used home you never know when you’ll need to replace the furnace, water heater, air conditioning unit, kitchen appliances, roof, doors, windows…the list of potential necessary replacements seems to go on forever. And they can really add up. For example, the typical furnace has a 20-year life expectancy and the typical central air system 15 years. Replacing them could cost you $4,100 for an air conditioning unit and $3,675 and up for the furnace, depending on the system you choose. The average shingled roof will last about 25 years and having to replace it could cost anywhere from $5,000 up. And if the kitchen needs to be remodeled, that could add an additional $20,000 to $40,000. But when you buy a new home—especially a Tribute Home where 45 extras come extra—you won’t have to worry about any of those additional costs.
NEW HOMES: LOWER LONG-TERM COST
At first glance of new vs. used homes, new homes have a higher price tag. But you have to take into consideration all of the benefits a new home provides compared to a resale:
- Modern features (e.g. bigger closets, a kitchen island, open floor plan, walls pre-wired for flat screen TVs, or radiant floor heating);
- Being able to customize the home before construction is completed
- Spending less on maintenance and repairs
- Living in a home that meets modern construction standards
- Being the first person to live in the home
- To live in a newly developed neighborhood near other new homes
For the same price, 2 in 5 of Americans (41%) strongly or somewhat prefer to buy a newly built home over an existing home, with modern features and the ability to customize the home are the top reasons. Unlike most existing houses, new homes also come with important modern safety features, including fire retardants in materials such as carpeting and insulation. Buying a new vs. used home means hard-wire smoke and carbon monoxide detectors are also wired into new homes, making it unnecessary for new owners to install less-dependable battery-powered detectors.
Many people don’t purchase new homes simply because they’re hard to find. But the spectacular Tribute Homes active adult homes and communities are being built in four of the top ten housing markets, found in North and South Carolina. What’s more, year over year the inventory of new homes for sale rose 25% according to the Census—well ahead of the 3% increase in the inventory of existing homes for sale according to NAR. So when considering new vs. used homes, new homes will be easier to find in most areas across the country.
Mortgage financing is also something to consider when deciding why to buy new versus a used home. Builders, like Tribute Homes, often have mortgage subsidiaries or affiliates and are capable of personalizing financing — down payments, “points,” other loan fees and even interest rates — to your specific situation. Many new home builders are also willing to work with you to help offset some of the closing costs. These are things you typically won’t find in a resale home.
Resale value is also something to think about when buying a new house or a used one: new homes keep their value and be more desirable over the next ten years compared to a home that’s already 25 years old.
When thinking about buying a new home in North or South Carolina, consider Tribute Homes. We offer brand new homes in some of the Carolinas’ most exciting active adult communities and retirement communities. From charming ranch single-family homes to spacious two-story floor plans perfect for having friends and family come visit, there’s sure to be a new Tribute home that’s perfect for your wants, needs, and lifestyle.
There are a lot of financial benefits why to buy new vs. used. Contact Tribute Homes today to see why an active-adult Tribute home should be at the top of your list as you near retirement!