Pro's And Con's of Buying A New vs. Old Home
This blog is a direct transcript from the video below. This comes in 2 versions: You are able to watch the video, read the blog for your convenience.
It truly is the age-old debate, but sometimes there isn’t a whole lot of context put into the conversation to make an informed decision about buying a newer or older home.
It all comes down to, what does your dream home look like? Is it full of historic character sitting back on 4 gorgeous acres? Or is it a modern home full of smart technology?
Let’s start off by jumping into the pro’s of getting a newly built home:
Well for starters, the home is brand new! It’s most likely better functioning, unless you were unfortunate enough to get a builder who focused more on the quantity of homes built than the quality of them. The home will be up to code with the correct permits that have been pulled. In an older home, some ambitious DIY’er may have thrown on a makeshift addition that isn’t up to building code, which would most likely result in the need to pay fines and/or tear down the addition.
The biggest appeal to a new home, If the home wasn’t built yet, is having the option to choose from the builder’s custom packages and make the home exactly what you want. With new homes, comes new modern technology, energy efficiency and other conveniences such as built in appliances, solar panels, dual pane windows, and nicely networked electrical systems that aren’t just a spider web of wires crammed above your drop ceiling.
In one of my last YouTube videos, (Check it out here if you’d like: https://youtu.be/6G22wxxW23Y) I talked about home warranties and the importance of them. With a new build you’re able to get your hands on a builders warranty (if it’s offered of course), and the appliances will most likely still have their manufactures warranty as well.
Depending on how old the new home is, there will be a clear path of ownership. Just like a used car, you have curiosity about how the previous owners maintained it. A home works the same way, so remember that 2-3 years of bad maintenance on a new home is worse than 10-20 years of good maintenance on an old home.
Lastly, when it’s a hot market like it is currently, older homes are on and off the market in just a few days, new homes are usually constructed in packs, so the likeliness of a line being formed to put in an offer is not as high on a new home.
Let’s transition into the con’s of buying a new home.
A lot of newly constructed homes have a homeowners association, which consists of a monthly or annual fee to ensure upkeep of the neighborhood and shared amenities. You can love them or hate them, it’s truly a preference. It’s not necessarily a con, but more so something that isn’t optional to pay for.
If you haven’t noticed, they aren’t making land anymore so the cost continues to increase, so most builders are buying up lots in less desirable locations so they can sell the homes at an affordable price. Not only are the homes typically far from town, builders try to build as many homes as they can on the land they have, so the acreage per home isn’t always ideal.
Newly constructed homes are also more expensive than purchasing an old home, but again it truly is a preference that has numerous factors at play. If we go back to the car example, a new car might not need maintenance right away but it’ll cost more upfront, a used car will cost less up front, but you’ll need to update some of its parts.
One of the biggest arguments against not getting a new construction home, is the fact that most tend to be “cookie cutter” or all made to look the same, and most people believe they lack character and have the bare minimum, that’s why you’ll hear the phrase “they just don’t make them like they used to”
Lastly, being a newly constructed home, it hasn’t settled very long on the earth. If you’ve viewed older homes, you’ll notice some unsubtle or subtle slanting due to the ground shifting around. It may not be for years to come, but just something to note.
Alright, let’s tackle the pro’s for purchasing an older home. We will call an old home, pre 1990.
The first pro, as I mentioned before is the home’s character that they just don’t make anymore! This old character is also set up on a large piece of land and will be closer to town if you want it to be, depending on where you are of course.
With older homes, there aren’t always homeowners associations, so you can have more creativity with the exterior of your home. Depending on how strict the HOA is, they may not allow you to have a cool blue door, certain trees or bushes, or that picket fence you’ve always wanted to put up. So if you want to paint your house pink, there’s nothing stopping you aside from maybe the glares from your neighbors.
Since the home’s are older, the neighborhoods are most likely established, neighbors have been in the area for generations and zoning ordinances will most likely not make any changes to an existing neighborhood.
The neighborhood will also have mature trees and landscape, so your nature walk in the morning might be a little more appealing in an older neighborhood.
Jumping to the con’s of an older home
Obviously the home is older, so you’re going to have to make repairs or necessary updates. You May need to bring a few things up to code that could potentially be costly. The bones of the home may be questionable because you don’t see them everyday. Most importantly, you may face hardship trying to get financing to purchase the home because of the need to pass certain inspections depending on the type of financing you get.
A con that you may or may not have noticed is older homes tend to have smaller closets, storage spaces and garages. Newer homes put emphasis on walk in closets and an adequate amount of storage. People just have more stuff than they used to so homes needed to adapt a little bit.
Lastly, purchasing an older home may leave you with higher energy bills if the home isn’t sealed properly or made energy efficient.
Whether you’re considering a new or old home, there’s most definitely a lot of thought needed to decide which option is best for you and your situation. I simply just wanted to lay out the reality of both. It would be in your best interest to deeply consider these pros and cons and take a tour of a few homes in each category to give you a real-life example.
Don’t hesitate to reach out with any questions you may have! Always happy to be a resource.
Andrew McManamon is a Michigan REALTOR® with Signature Sotheby’s International Realty and provides real estate services to Buyers, Sellers and Investors throughout SE Michigan including Livingston County, Oakland County, Washtenaw County, Genesee County & beyond. Andrew has become one of the rising stars of Michigan real estate agents. Prior to his real estate career Andrew was responsible for managing a senior living facility in Brighton, Michigan as a dining supervisor and an activities assistant. Andrew’s passion to help people is unlike any other, and he continues to strive to be best resource he can be. Andrew graduated from Cleary University in Howell, Michigan with a double major and currently resides in White Lake, Michigan.