As you’re trying to decide between buying a new home and looking into resale homes, there are a lot of considerations. One area that may not be on your list is the Cost of Ownership of a home, especially a home that is more than 10+ years old.
Here are some of the considerations when thinking about the Cost of Ownership and how these considerations fit into your lifestyle.
- Energy Efficiency that could result in lower utility costs: New homes frequently offer improved energy efficiency due to better wall insulation and high-quality heating and cooling systems. These features can provide comfort as well as cost savings, compared to their older counterparts. If you buy a resale home, keep in mind that you could end up with poor insulation, drafty windows or an old furnace, all of which may need to be replaced.
- Efficient Design and features: Personalization is probably the area that differs the most between new and resale home purchases. If you buy a resale home, you can choose to do renovations to make the home your own. For example, you may decide to hire a contractor for a kitchen renovation before you move in. Or you might opt to live with the current décor for a bit while you save money for future renovations. When you build from the ground up, you’ll likely have more opportunities to personalize your home before you make it to the closing table. Keep in mind: One of the main perks of building from the ground up is that many of the personalization options—from cabinetry to flooring to home technology—may be able to be rolled into your monthly mortgage payment.
- Lifestyle – free time: When you buy a resale home, you could be purchasing your share of projects inside the home. Even a home in good condition may need cosmetic changes to suit your style. By committing to these projects, you are making a choice to work on your home and set some of your lifestyle interests aside. When you build a home from the ground up, cosmetic choices like paint and backsplash tile will be personalized to your taste—and best of all—those projects will be done, potentially reducing your future projects for many years.
- Easier exterior: Even the facade of a brand-new home generally requires less maintenance than that of a resale. New homes are typically made with modern materials, designed to outlast their older counterparts. On a resale home, you may have to pay for a costly exterior paint job shortly after purchase.
- Warranties: Brand new homes can include a builder’s warranty, providing an added sense of security for the year ahead. Heating and cooling systems are also new and often covered under manufacturer’s warranties, so you don’t need to worry about replacing them right after you move in. On the other hand, many resale homes don’t come with a warranty included in the price.
- Appliances: Some builders offer homebuyers optimal convenience by including brand new appliances, such as a refrigerator and washer & dryer. And if they’re not already included in the price of your home, you may be able to roll their cost into your mortgage. When looking at the price of a resale home, you may need to factor in out-of-pocket expenses like replacing outdated appliances or buying a new washer and dryer. BONUS: You won’t have to remove or dispose of old appliances if you buy new.
- Maintenance: The cost of maintenance is something many homebuyers overlook, but it should be a prime consideration when establishing your buying budget. Roof replacement, plumbing renovations and other emergency repairs add up quickly!
Here is an example of suggested costs and savings:
|Principal – Loan||+$10,000.00|
|Interest / Financing||4% -5%|
|Taxes/ Insurance||Same or less|
|Additional Cost Payment||$40 / month|
|Maintenance Expeses||$60 / month|
|Savings in Utilities||($60) – ($100) / month|
|Net Savings||($80) – ($120) / month|
As you can see, buying a new home offers distinct advantages that you’ll want to keep in mind while you’re shopping around. Be sure to compare the cost of new vs. resale homeownership, taking all of these factors into consideration. Making a smart move means looking at the big picture, so think about the benefits you’ll care about tomorrow as well as today.
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