The Downsides of Buying a New Home

Buying new versus used can be a challenging decision. While brand new homes are less common right now, given the state of the economy, there are still builders out there developing new neighborhoods and building new properties to custom order. Buying a new home means you can get exactly what you want and have the pleasure of knowing that no-one else has lived there, but it also comes with a whole host of potential problems.  

New homes come with a higher price tag.

One of the biggest disadvantages of buying a new home is that new homes typically come with a higher price tag. Developers and builders load new homes with a host of features and amenities, and then charge you for the privilege of buying it. You may be able to get a bare-bones house with all the basics and buy the extras cheaper from an outside source, but that requires some extra financing and work on your part.

You have no guarantee of what you’re getting when you build.

Building, particularly, is a very risky business. You’ll go see a model home with all the extras, fully furnished and decorated by a high-end designer. When your home is built, you may not have the same finishes, the same color scheme or even the same floor plan.

Look out for language in the contract that enables the builder to make changes to the floor plan and aspects of the property. And make sure you find out how much of that model home is custom upgrades, and what comes standard with the home you’re going to build.

It’s difficult to tell how the property will age.

With a new property, it’s difficult to tell how the property will age. If you buy a home that’s ten or twenty years old, or even fifty years old, you’ll have a good idea of how it weathers the test of time. Since you’ll want a property at least as long as you hold the mortgage, having a home that stands up against Father Time is an asset.

With new homes, you’ll see flashy new construction and sparkling finishes. You won’t be able to see how that home is going to look in five or ten or twenty years, and that can lead to making a poor decision about what to buy overall.

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Steve SchraderBachar is a local mortgage planning expert who resides in Iowa and provides service to the clients of his mortgage planning practice across the Midwest.  You can reach Steve at 1-515-289-4381 or 515-360-5197.