Buying a Home: New vs. Existing

So, you have made the BIG decision – it’s time to buy a home.  Where should you start?  The obvious first step is to pick a location, what part of town works for you and your family?  How much commute time are you comfortable with?   Do you prefer a particular school district?  If so, what are its boundaries?  Remember to include any other geographic criteria such as your preferred recreational activities, shopping, churches, etc.

While you are considering the “where” part of the equation, you must also consider “how.”  Financing options have changed; it’s wise to work with a lender FIRST to determine what you can afford. 

Once you have decided “where” and “how” you need to think about “what” you want to buy.  Do you want a brand new home or an existing/resale home?  Great opportunities exist for both right now.  Here are some pros and cons for you to consider.

Features:  If you purchase a new home from a builder you will have the choice to make it your own.  And let’s be honest, there’s nothing like being the first cook in a sparkling new kitchen!  You can pick the cabinets, counter tops, flooring and much more.  Most builders have extensive options lists.  This is particularly nice for plumbing and electrical options which will be installed before drywall goes up.  It’s more expensive to go back into an existing home and add plumbing or electrical items.  On the other hand, with most new homes you will need to install back yard landscaping and window coverings after close of escrow, which can be costly.  Most existing homes will have landscaping and window coverings installed saving you time and cash.

Warranties: Arizona new home builders will generally include a one year warranty on most everything in the home (including workmanship) and then a two year warranty on the major systems of the home and structural items.  These time frames are governed by the Arizona Registrar of Contractors.  Some builders include a longer warranty – up to 10 years, but you must ask clear questions about what is covered during that period – specific items could be excluded.  You can purchase warranty protection for an existing home.  Some resale sellers even offer the coverage with the sale of the home.  The warranty coverage for existing homes can vary so be sure to ask what exactly is covered and what is not covered.  Also, find out if upgrades are available to more complete protection.  The cost is usually reasonable and can save you money down the road.

Timing:  If you are anxious to find your next home, close escrow and get moved in quickly, a new build may not be for you.  It can take a new home builder many months to construct a new home and delays are always possible (labor and material shortages are an issue for some builders today).  For some families owning a brand new home is worth the wait, but if you don’t have the luxury of time you should consider an existing home or a “spec” home from a builder.  Spec homes also known as “inventory” homes are often available to close escrow as quickly as a resale; however, since the home is already under construction, you may loose some of the option choices that you would have had with a new build.

Many new home builders are offering incredible prices and incentives right now.  And the large number of REOs and short sales on the market are creating real opportunities for buying an existing home.  Either way, it is a great time to buy a home.

For help in researching schools, check out this website:  GreatSchools.net.  For more information about new home warranty requirements check with: Registrar of Contractors.  And for more information about warranties for resale homes check out: Old Republic.  After considering the options above you should have a good idea what works best for you and your family.  In any event you should consult with a real estate professional to be sure your interests are protected during the transaction.