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It's not like "Beware! Don't Ever Buy A New Home!" But there are some things to be aware of:
1) Non-refundable deposits - a lot of new home builders will require some pretty hefty deposits, especially for upgrades.
2) New home developers will try to get you to use their preferred lenders and offer incentives to do so. Most of the time this is not in the homebuyer's best interest.
3) During the Boom years some of the tract home developments went in way too quickly and quality suffered.
4) Sometimes infrastructure lags behind in a fast-growing suburban development.
5) Some new home builders have gone bankrupt and left half-finished homes or empty weed-covered lots.
6) Unless the subdivision is almost completed when you buy, you'll have a tough time reselling anytime in the near future. You'll have to compete with the new construction and incentives offered by the builder.
7) There's bound to be some initial foundation settling in a new home. Unfortunately sometimes more severe problems or issues with shoddy construction don't show up til after the builder warranty runs out. (ALWAYS hire a good home inspector on your own to inspect the house before you move in.)
8) People don't realize how much it costs to landscape a home and buy window coverings, refrigertors, washers/dryers, etc. Most times these are things that will be included (or can be negotiated) when purchasing resale.
IMHO, if someone really wants "new" I think individual spec homes in an already established neighborhood are a much wiser choise than a tract home. These smaller home builders can't afford to sit on these, so you can usually negotiate a pretty good deal. Also, these small guys really rely on a good reputation to keep the business going, so most are very apt to stand behind their builds. (Of course, you still need to research the builder and make sure he's reputable.)
Where we live you cant afford the luxury of an individual spec home. So,
the next best is the new track home. I try to find the positives
in them and sure,there are some negatives,but hopefully minimal.Our
front yard is landscaped so only the backyard is ours to do,within 2 yrs.
Most times, people change alot about an older home when they
move in, so it ends up costing alot too. New is better IMHO.
I was following this thread from day 1 and tried really hard to think of a good one. I finally came up with one.
Never buy a house from a seller with no economic sense or who doesn't return emails. (I want to use a stronger word, but I'm trying to be nice.)
Or, Never buy an upside down house that is not advertise as a short sale.
Here's the potential nightmare that I'm in.
We bought a house from a medical doctor, who apparently is really busy and doesn't have a good economic sense. Since she bought the house last year with 100% financing, she will have to bring in money to close. In short, she has to pay $95k to sell. When she listed the house 2 months ago, she told her agent that she has cash to close. So they never advertise it as a short sale.
The closing is set in 2 weeks. For the last several days, the closing agent (my attorney) has been trying to reach the seller by email/phone to find out whether she has $95k to close. The seller didn't respond. Finally, yesterday, the seller told my attorney that she doesn't have money to close.
It gets even worse. Last week, she has applied for loss mitigation, which can take forever, if she qualifies. Being a medical surgeon, she doesn't have economic hardship and never has been behind payment. Everybody except her and her fiancee, who happens to be another surgeon, thinks she is qualified for mitigation. We think she's bluffing. So we are trying to force her to come up with money to close per contract. Otherwise, we will seek legal actions against her.
These doctors clearly have no idea on mitigation process and the consequence of it. And they never respond to the closing agent's phone/email.
I guess it will be hard to determine whether the seller is sensible when house hunting. At least, if you can, find out what the mortgage balance is. Somebody told me to avoid buying a house from a lawyer. No offense to the lawyers. I may add the medical doctors to that list. Again, no offense to the doctors. I usually respect doctors but I didn't know some of them could be this ignorant with numbers. I can give you more proofs of this economic nonsense by the sellers, but will not.
Perhaps, I may be generalizing to certain extent but, it may not be a good idea to buy a house that was purchased in the last 2 years. First, you may think you are getting a good deal because it's cheaper. But more importantly, the sellers lost a lot and can bite you at the end.
Please wish me that the seller doesn't do anything silly any more. She has caused so much trouble to everyone including her own agent.
That is a big one!! I definately agree with that one. I would have my own agent looking out for me. I was under the mistaken delusion that the agent that was helping me represented me. Not true when you buy one of her own listings.
Where we live you cant afford the luxury of an individual spec home. So,
the next best is the new track home. I try to find the positives
in them and sure,there are some negatives,but hopefully minimal.Our
front yard is landscaped so only the backyard is ours to do,within 2 yrs.
Most times, people change alot about an older home when they
move in, so it ends up costing alot too. New is better IMHO.
New home positives?
Lets see, for one the floor plans are modern.
2.Fresh,new,NEVER been lived in.
3.Usually no major remodelling needed.(Not always a plus for some
but for us)
Like I said in my post "IMO" they are better. We went the old
fixer upper route in our last house and hated it. I like modern,
new everything. Especially the bull nosed corners and huge master
bedroom with walk in closet. Also the nice kitchen and high
ceilings.
Weve been fortunate to watch ours being built so hopefully not
too many probs. Still having an inspection done by a different
inspector other than the builder.
There are definitely positives to purchasing new - just be careful where you buy. I'd be very cautious of buying in a newer development that has a long ways to go before it will be built out.
Kind of a nice compromise might be to purchase a resale that's 3 to 5 years old in a pretty much completed subdivision. Gives you the best of both worlds. Downside is that you won't get to pick your colors.
I've purchased everything from brand new (pick your colors) to new spec home (still got to pick flooring) to an old Victorian and one built in the 40's. My favorites have been the old Victorian (loved it - but definitely a money pit) and the spec home.
Now that I've been working in real estate for the past several years, I'm definitely more in ture with quality issues and resale issues. And you can have issues on those fronts whether the home is historic or brand new. A really great home inspector is worth his weight in gold, IMHO.
That is a big one!! I definately agree with that one. I would have my own agent looking out for me. I was under the mistaken delusion that the agent that was helping me represented me. Not true when you buy one of her own listings.
Definitely!!! Unfortunately we don't know in advance what house will be the one we choose, or I would choose a realtor who works for a completely different agency from the seller's agency.
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So,
What are some positives about new homes?
