Buying An Existing Home vs. Buying New Construction Directly From Builder
You have two distinct options when choosing to buy a home: buy an existing home or work with a builder to purchase a newly constructed home.
When it comes to buying a home, there are many decisions you’ll have to make but this choice is one of the most fundamental. What’s more, things have changed rapidly with technology and huge housing booms in certain areas of the country.
So, what’s a home buyer to do? Read on in this article to learn about the differences and similarities in the traditional and direct purchase methods of buying a home. Then use the questions provided at the end to aid you in making your decision. We’ll cover:
- How Traditional Real Estate Transactions Work
- How Buying Directly From The Builder Works
- Pros Of Buying An Existing Home
- Pros Of Buying A New Construction Home Directly From The Builder
- Cons Of Buying Directly From The Builder
- How To Know If You Should Buy A New Or Existing Home
How Traditional Real Estate Transactions Work
When you look to buy an existing home through a traditional real estate transaction, you’ll start by selecting a lender and getting preapproved for a mortgage. From there, you’ll go through a similar process to find and select a real estate agent. Together, you’ll look for a home based on what is available on the market. Once you find one you can see yourself living in, you’ll make an offer.
Thus begins the part of the real estate transaction that can get a bit tricky, though a great real estate agent can breeze you right through. Your offer will either be countered, accepted or rejected. This can go on, back and forth, for a while depending on the circumstances. The offer itself can include price negotiations, contingencies, allowances and more. Once the offer is accepted, you’ll begin the process of a home inspection and home appraisal. As your mortgage is in the works, you’ll obtain homeowners insurance and do a final inspection.
On closing day, you’ll get your key and get to begin enjoying your home!
How Buying Directly From The Builder Works
The process of buying a new construction home directly from the builder is fairly simple. First, you’ll want to research builders in the neighborhood you desire. Be sure to look for experience, licenses and insurance, reviews and reputation. You’ll want to visit model homes to discover what suits you and your family best. You can also ask about warranties and customer service when deciding which builder to use.
Once you’ve selected a builder, you’ll be able to work directly with their agent as well as their preferred lender. While this is not required, it does streamline the process. Many times, incentives are offered for using the preferred lender because it saves everyone time, energy and communication efforts.
You’ll get preapproved for a mortgage and sign a contract, all the while construction has already begun! From there, you’ll have inspections and walkthroughs scheduled until your closing day when you can enjoy your brand new home!
Pros Of Buying An Existing Home
The neighborhood of an existing home is well established, so you know exactly what you’re getting into. That means you can know what to expect between neighbors, home values, traffic, crime and schools.
If you’re looking for a home with a particular look or feel, an existing home might be a great choice as they can stretch back to different design periods and have unique characteristics that are no longer part of modern design.
Pros Of Buying A New Construction Home Directly From The Builder
Many of the benefits of a new construction home are evident: it has never been lived in and everything is brand new! You’ll also have all the latest amenities and features which will make your home more comfortable, convenient and save you on your energy bill! You won’t have to repair or renovate anything right away, which makes your new construction home move-in ready!
New construction homes can have a much more streamlined process as you do not necessarily need a real estate agent and can work directly with the builder. Builders also typically have preferred lenders which make the mortgage process quick and efficient.
Cons of Buying An Existing Home
When purchasing an existing home you might find there to be less inventory available. Another con of buying an existing home is that you will often have to make your own repairs and changes in order to make it move-in ready. There will likely also be things that went by unnoticed or renovations that you want to make once you’ve moved in.
You also might find more competition in a typical real estate transaction as more than one buyer might be putting an offer on a particular home.
Other cons to buying an existing home is that they lack all the bells and whistles you might get with a new home and they can be much less energy efficient.
How To Know If You Should Buy A New Or Existing Home
With all of these pros and cons, it can be a bit baffling to decide on an existing home or a new construction home. That’s okay, we have a few questions that can help you come to a confident decision.
What neighborhood do you want to live in?
This is a great question because it can automatically weed out one or the other. There may be only new construction taking place in a neighborhood. Likewise, there may be no room for new construction in a certain neighborhood, forcing you to wait on an existing home to be listed.
What is your budget?
While new homes are certainly affordable, they can, at times, be more expensive than an existing home. Take a look at your budget to help you make your decision.
Do you like to Do-It-Yourself?
If you like renovations and doing projects yourself, then an existing home might be just perfect for you. However, if you know you don’t like to or have time to do any projects in your home, then your decision is much easier.
What is your timeline?
Builders can tell you almost exactly when a home will be ready. That timeline may or may not work with yours. Then again, it could be perfect! Likewise, if there are no existing homes available, you might need to look into new home construction. However, the perfect home could be available exactly when you need it! Either way, your timeline can certainly help you make your decision.
Do you have contingencies?
Sometimes traditional real estate transactions do not work with contingencies such as requiring the sale of your current home. Sometimes builders will have the same preference. However, the specific home listing you’re looking at will tell you if contingencies are an option (or you can contact the listing agent). Likewise, builders like Henry Company Homes are happy to work with you and your contingencies in order to make your home buying process smooth.
If you happen to be in the market for a new construction home, consider Henry Company Homes! We’ve been building homes in the Milton, Pace, Navarre and Gulf Breeze areas for over 28 years so we understand the importance of making your home safe and secure. We pride ourselves in helping families make our houses their homes. If you have any questions, please give us a call and we’d be happy to chat!
Buying An Existing Home vs. Buying New Construction Directly From Builder
You have two distinct options when choosing to buy a home: buy an existing home or work with a builder to purchase a newly constructed home.
When it comes to buying a home, there are many decisions you’ll have to make but this choice is one of the most fundamental. What’s more, things have changed rapidly with technology and huge housing booms in certain areas of the country.
So, what’s a home buyer to do? Read on in this article to learn about the differences and similarities in the traditional and direct purchase methods of buying a home. Then use the questions provided at the end to aid you in making your decision. We’ll cover:
- How Traditional Real Estate Transactions Work
- How Buying Directly From The Builder Works
- Pros Of Buying An Existing Home
- Pros Of Buying A New Construction Home Directly From The Builder
- Cons Of Buying Directly From The Builder
- How To Know If You Should Buy A New Or Existing Home
How Traditional Real Estate Transactions Work
When you look to buy an existing home through a traditional real estate transaction, you’ll start by selecting a lender and getting preapproved for a mortgage. From there, you’ll go through a similar process to find and select a real estate agent. Together, you’ll look for a home based on what is available on the market. Once you find one you can see yourself living in, you’ll make an offer.
Thus begins the part of the real estate transaction that can get a bit tricky, though a great real estate agent can breeze you right through. Your offer will either be countered, accepted or rejected. This can go on, back and forth, for a while depending on the circumstances. The offer itself can include price negotiations, contingencies, allowances and more. Once the offer is accepted, you’ll begin the process of a home inspection and home appraisal. As your mortgage is in the works, you’ll obtain homeowners insurance and do a final inspection.
On closing day, you’ll get your key and get to begin enjoying your home!
How Buying Directly From The Builder Works
The process of buying a new construction home directly from the builder is fairly simple. First, you’ll want to research builders in the neighborhood you desire. Be sure to look for experience, licenses and insurance, reviews and reputation. You’ll want to visit model homes to discover what suits you and your family best. You can also ask about warranties and customer service when deciding which builder to use.
Once you’ve selected a builder, you’ll be able to work directly with their agent as well as their preferred lender. While this is not required, it does streamline the process. Many times, incentives are offered for using the preferred lender because it saves everyone time, energy and communication efforts.
You’ll get preapproved for a mortgage and sign a contract, all the while construction has already begun! From there, you’ll have inspections and walkthroughs scheduled until your closing day when you can enjoy your brand new home!
Pros Of Buying An Existing Home
The neighborhood of an existing home is well established, so you know exactly what you’re getting into. That means you can know what to expect between neighbors, home values, traffic, crime and schools.
If you’re looking for a home with a particular look or feel, an existing home might be a great choice as they can stretch back to different design periods and have unique characteristics that are no longer part of modern design.
Pros Of Buying A New Construction Home Directly From The Builder
Many of the benefits of a new construction home are evident: it has never been lived in and everything is brand new! You’ll also have all the latest amenities and features which will make your home more comfortable, convenient and save you on your energy bill! You won’t have to repair or renovate anything right away, which makes your new construction home move-in ready!
New construction homes can have a much more streamlined process as you do not necessarily need a real estate agent and can work directly with the builder. Builders also typically have preferred lenders which make the mortgage process quick and efficient.
Cons of Buying An Existing Home
When purchasing an existing home you might find there to be less inventory available. Another con of buying an existing home is that you will often have to make your own repairs and changes in order to make it move-in ready. There will likely also be things that went by unnoticed or renovations that you want to make once you’ve moved in.
You also might find more competition in a typical real estate transaction as more than one buyer might be putting an offer on a particular home.
Other cons to buying an existing home is that they lack all the bells and whistles you might get with a new home and they can be much less energy efficient.
How To Know If You Should Buy A New Or Existing Home
With all of these pros and cons, it can be a bit baffling to decide on an existing home or a new construction home. That’s okay, we have a few questions that can help you come to a confident decision.
What neighborhood do you want to live in?
This is a great question because it can automatically weed out one or the other. There may be only new construction taking place in a neighborhood. Likewise, there may be no room for new construction in a certain neighborhood, forcing you to wait on an existing home to be listed.
What is your budget?
While new homes are certainly affordable, they can, at times, be more expensive than an existing home. Take a look at your budget to help you make your decision.
Do you like to Do-It-Yourself?
If you like renovations and doing projects yourself, then an existing home might be just perfect for you. However, if you know you don’t like to or have time to do any projects in your home, then your decision is much easier.
What is your timeline?
Builders can tell you almost exactly when a home will be ready. That timeline may or may not work with yours. Then again, it could be perfect! Likewise, if there are no existing homes available, you might need to look into new home construction. However, the perfect home could be available exactly when you need it! Either way, your timeline can certainly help you make your decision.
Do you have contingencies?
Sometimes traditional real estate transactions do not work with contingencies such as requiring the sale of your current home. Sometimes builders will have the same preference. However, the specific home listing you’re looking at will tell you if contingencies are an option (or you can contact the listing agent). Likewise, builders like Henry Company Homes are happy to work with you and your contingencies in order to make your home buying process smooth.
If you happen to be in the market for a new construction home, consider Henry Company Homes! We’ve been building homes in the Milton, Pace, Navarre and Gulf Breeze areas for over 28 years so we understand the importance of making your home safe and secure. We pride ourselves in helping families make our houses their homes. If you have any questions, please give us a call and we’d be happy to chat!