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Old 02-01-2015, 08:37 PM
 
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I am a novice to US real estate buying and find it very odd that so many buyers buy older homes though they can afford brand new homes for less. My boss just bought one in University Park and my girlfriend's parents bought theirs in Willowbend. Why do people do that when there are otherwise comparable but brand new homes with new appliances available in equally nice areas that are hardly half hour away. What's their rationale?
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Old 02-01-2015, 08:42 PM
 
206 posts, read 334,085 times
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Quote:
Originally Posted by ConfusedBuyerInDFW View Post
I am a novice to US real estate buying and find it very odd that so many buyers buy older homes though they can afford brand new homes for less. My boss just bought one in University Park and my girlfriend's parents bought theirs in Willowbend. Why do people do that when there are otherwise comparable but brand new homes with new appliances available in equally nice areas that are hardly half hour away. What's their rationale?

Location.... Location.... Location....
Urban dictionary states the following definition for this quote
"Phrase to remind people that the most determining factor in the price of a house is the location. The property itself can be build on, extended, knocked into the next property etc."

There are several reasons people buy existing homes. Track record, in an existing home sale any known issues will be revealed in the seller disclosure. Price used to be more negotiable but not anymore for the right house in the right location with the bidding wars in the current market. Established neighborhood has more charm and character. Older homes might not be the typical cookie cutter design like in new developments. Cheaper or no HOA, these puts limits on how you use your property and legally they can foreclose a house with right reasons. These are some I can think of and certainly there are others.

Last edited by shrapr; 02-01-2015 at 09:09 PM..
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Old 02-01-2015, 08:45 PM
 
Location: Shady Drifter
2,444 posts, read 2,752,511 times
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Quote:
Originally Posted by ConfusedBuyerInDFW View Post
I am a novice to US real estate buying and find it very odd that so many buyers buy older homes though they can afford brand new homes for less. My boss just bought one in University Park and my girlfriend's parents bought theirs in Willowbend. Why do people do that when there are otherwise comparable but brand new homes with new appliances available in equally nice areas that are hardly half hour away. What's their rationale?
A half-hour away adds up to a lot of hours over a month. And new homes generally are more expensive than the use homes.
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Old 02-01-2015, 08:49 PM
 
1,087 posts, read 778,922 times
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Quote:
Originally Posted by shrapr View Post
Location.... Location.... Location....
That's too much insight for the original poster with that statement.

The answer is: older homes took up more desirable locations long time ago and made these older places the way they are. Newer homes must be built in less proven locations. These less proven locations, in comparison, do not have as good schools, restaurants, shops, freeway access ...

Yes, home mostly is not about building materials and its newness. Instead, it is mostly about where it is.

These are just real estate concepts.
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Old 02-01-2015, 08:57 PM
 
13,194 posts, read 28,211,046 times
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Quote:
Originally Posted by ConfusedBuyerInDFW View Post
I am a novice to US real estate buying and find it very odd that so many buyers buy older homes though they can afford brand new homes for less. My boss just bought one in University Park and my girlfriend's parents bought theirs in Willowbend. Why do people do that when there are otherwise comparable but brand new homes with new appliances available in equally nice areas that are hardly half hour away. What's their rationale?
99% of the time, a half hour away to UP or WillowBend is a FAR inferior location with inferior schools. There is a reason why a brand new 5000sf home costs $2M in UP and <$500k in The Colony or Grand Prairie....the dirt under the house in UP is worth $1M or more of the home's value.

The 75 year old house in UP that has been remodeled 4 times will ALWAYS be more valuable than a 2015-built home in Frisco or Littl Elm or Flower Mound because it's in UP (far superior central location, highly desirable schools, and police/city services that are unmatched).
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Old 02-01-2015, 09:03 PM
 
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Not everyone wants to live in a far flung 'burb.
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Old 02-01-2015, 09:15 PM
 
206 posts, read 334,085 times
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Quote:
Originally Posted by TurtleCreek80 View Post
99% of the time, a half hour away to UP or WillowBend is a FAR inferior location with inferior schools. There is a reason why a brand new 5000sf home costs $2M in UP and <$500k in The Colony or Grand Prairie....the dirt under the house in UP is worth $1M or more of the home's value.

The 75 year old house in UP that has been remodeled 4 times will ALWAYS be more valuable than a 2015-built home in Frisco or Littl Elm or Flower Mound because it's in UP (far superior central location, highly desirable schools, and police/city services that are unmatched).

True, my best buddy lives in Highland Park, 1900 square feet built in 1940, home price is about $650K.
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Old 02-01-2015, 09:37 PM
 
13,194 posts, read 28,211,046 times
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Quote:
Originally Posted by shrapr View Post
True, my best buddy lives in Highland Park, 1900 square feet built in 1940, home price is about $650K.
Probably worth more like $750k-$800k in this market. Those cottages are pushing $400/sf unless on Mockingbird or Lovers. There's a 1200sf home that's pending for $600k right now and it's the last lot next to the Tollroad in UP.
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Old 02-01-2015, 09:56 PM
 
Location: Dallas area, Texas
2,353 posts, read 3,849,115 times
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Quote:
Originally Posted by ConfusedBuyerInDFW View Post
I am a novice to US real estate buying and find it very odd that so many buyers buy older homes though they can afford brand new homes for less. My boss just bought one in University Park and my girlfriend's parents bought theirs in Willowbend. Why do people do that when there are otherwise comparable but brand new homes with new appliances available in equally nice areas that are hardly half hour away. What's their rationale?
As others have stated, location.

The schools in University Park and Willow Bend are a known quantity and are better then schools half an hour away. And the school you are zoned to now might not be the school that you are zoned to next year. Not good for students, families, and maybe not resale of your house.

You can put new appliances in older homes. I'm not sure why you mentioned this. You can remodel and upgrade older homes too.

New homes and neighborhoods don't have mature trees or a sense of community. When everyone is new and the schools are new and the shops are new, there are no roots, no traditions.

Newer is not always better. Antiques can be valuable for a reason. Some value character over cookie cutter.
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Old 02-01-2015, 10:00 PM
 
781 posts, read 1,214,542 times
Reputation: 1024
Quote:
Originally Posted by ConfusedBuyerInDFW View Post
I am a novice to US real estate buying and find it very odd that so many buyers buy older homes though they can afford brand new homes for less. My boss just bought one in University Park and my girlfriend's parents bought theirs in Willowbend. Why do people do that when there are otherwise comparable but brand new homes with new appliances available in equally nice areas that are hardly half hour away. What's their rationale?
I prefer new homes as well, but if everyone had the mentality of only wanting a brand new home, there'd eventually be no land left to build them. When you say 30 minutes further for new, even that's a stretch in most cases during peak traffic times. I'd much rather live in Willow Bend than say, Celina, even if the house in Willow Bend was built in 2000 and the Celina house was built in 2015. It's too far out & honestly semi-depressing. However, no question you get more value per sq. ft in the extremely exurban areas, so might be a good option if you're trying to stay within a certain budget & have flexibility to WFH etc, because you will definitely pay a premium for the better locations.
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