Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Been trying to decide on a direction to go in our new home search. We are considering 2 home options, 1 being a new construction home and the other being a 7 year old home(in decent condition, previous owner chose all standard options during construction) being built by the same builder(in the same area as well, for schools etc.). Both homes are pretty comparable:
Similarities
============
Both have 4 bedrooms and similar layouts
Both are within 2400-2500 sqft under air
Both built by the same builder
Both in the same area, gated communities, with identical school zones etc
Both have similar lot sizes (new home is lake front, existing on quiet corner)
Differences
============
The existing home is price $80k less than the new construction
The existing home has 1 full bath less than the new construction
The existing home has a $160 higher HOA cost
The new construction has a better layout transition rooms (entry to dining to living to kitchen)
The existing home(which is a foreclosure) to be on par with the new as far as treatments to bathrooms, floors, kitchen, etc, is going to need approximately $35k-$40k worth of renovations/upgrades.
The new construction option also gives us additional time to save and put down a larger down payment but, still end up with a higher monthly mortgage payment (invested money difference being about $45k~ after renovations/upgrades completed). The allure of the new home and better layout is tempting me to go the construction route but, the savings the existing home provides are hard to ignore.
Any suggestions on the value of the 7 year old home vs. a new construction option, either being worth the extra cost or the better investment over the 8-20 years+ that we plan on being in the home.
Will they both appraise for their asking price? I ask because $80k is a TON of difference in my area for a 4 bedroom, 2500 square foot house. In fact, that is about 50% of the total house cost. And also because if they are the same builder, same approximate footage, same number of bedrooms, then unless condition on the existing one is very poor (from what I read, it appears to just be mostly upgrades/updating that you are wanting to do, rather than necessary repairs), I have to wonder if the new one isn't overpriced.
I tend to agree with the assessement of Lacerta that an $80k upcharge for a nicer layout an extra bath and seven years newer is pushing the "overpriced" line.
I am curious as to whether there are other "perks" that come with the new house -- I have seen developers that keep the most wooded sites or those furthest from arterial roads for their "most premium" homes. Even if the size of the house and lot is very similar you cannot make up for the noise of traffic vs the chirp of wildlife...
The existing home is likely going to need a new roof, furnace and AC 7 years sooner than the new build.
Since this is an HOA, know the law in your state for the association's ability to recover some portion of the amount of unpaid assessments before the sheriff's sale. My own state gives the HOA the ability to assess the buyer at closing for up to 6 months of prior unpaid assessments/interest.
Just curious as to why the HOA fee is less on the new build? What's the basis for assessment in this place?
The existing home is price $80k less than the new construction
Quote:
Originally Posted by home1023
The existing home has a $160 higher HOA cost
Quote:
Originally Posted by home1023
The existing home(which is a foreclosure) to be on par with the new as far as treatments to bathrooms, floors, kitchen, etc, is going to need approximately $35k-$40k worth of renovations/upgrades.
I think those are the three key pieces of information - and if the older house requires $40K in upgrades to be comparable with the new house, then the fact that it's priced $80K less, becomes less important - it's really only $40K less, once you deduct the cost of the renovations.
Quote:
Originally Posted by home1023
Any suggestions on the value of the 7 year old home vs. a new construction option, either being worth the extra cost or the better investment over the 8-20 years+ that we plan on being in the home.
You plan to stay there a long time, and the longer you stay, the more benefit you'll get with a lower HOA payment - so the newer house comes out on top, in that regard.
At first glance I thought the older house would be the best choice, but based on the fact that it needs renovations to be comparable, and the fact that the HOA payment is so much less on the new house, it sounds like the new house is definitely worth considering!
The lake front lot sounds like a premium lot. How much more are lake front lots v. the kind of lot that the foreclosure is on? Actually, I like the sound of the new house better.....
Will they both appraise for their asking price? I ask because $80k is a TON of difference in my area for a 4 bedroom, 2500 square foot house. In fact, that is about 50% of the total house cost. And also because if they are the same builder, same approximate footage, same number of bedrooms, then unless condition on the existing one is very poor (from what I read, it appears to just be mostly upgrades/updating that you are wanting to do, rather than necessary repairs), I have to wonder if the new one isn't overpriced.
The builder seems to be confident that the new construction will appraise as there are a number of comparable sales in the neighborhood. There is most definitely a premium price being paid vs the other home, from everything that I had read it seems there is always going to be a 'new' home markup over existing. The other home is in pretty good shape for being a foreclosure, just standard from top to bottom.
Quote:
Originally Posted by chet everett
I am curious as to whether there are other "perks" that come with the new house -- I have seen developers that keep the most wooded sites or those furthest from arterial roads for their "most premium" homes. Even if the size of the house and lot is very similar you cannot make up for the noise of traffic vs the chirp of wildlife...
Yeah, believe it or not the new construction is closer to the highway then the existing home by at least a 1/8 of a mile. I have visited both lots at different times and then newer lot has some a little audible noise (not much) and the existing home has hardly, if any. Notable perks would be the warranty that comes with the home(on dwelling defects (10 year) and appliances(manufacture standard)) and the new home appliances (A/C, water heater etc).
Quote:
Originally Posted by middle-aged mom
The existing home is likely going to need a new roof, furnace and AC 7 years sooner than the new build.
Since this is an HOA, know the law in your state for the association's ability to recover some portion of the amount of unpaid assessments before the sheriff's sale. My own state gives the HOA the ability to assess the buyer at closing for up to 6 months of prior unpaid assessments/interest.
Just curious as to why the HOA fee is less on the new build? What's the basis for assessment in this place?
I'll need to check if there are any unpaid assessments against the property, that's a good point. As for the HOA price of the new build, the sales office said that the new community will only have one entrance, no roving security and no cable included like the existing community in an effort to 'keep the prices down'.
Those costs of the roof, A/C, etc.. are what are scaring me a little, then again I know the home is only 7 years old. It would be nice knowing that in a new home they are mine to maintain properly from the start.
Quote:
Originally Posted by bouncethelight
I think those are the three key pieces of information - and if the older house requires $40K in upgrades to be comparable with the new house, then the fact that it's priced $80K less, becomes less important - it's really only $40K less, once you deduct the cost of the renovations.
Yeah, that is what is making the decision so tricky. We probably would only to be able to do the necessaries after closing and not the entire $35-$40k of renovations/upgrades. The remainder would need to spread over the following months (upwards of a year most likely).
Quote:
Originally Posted by Squirl
The lake front lot sounds like a premium lot. How much more are lake front lots v. the kind of lot that the foreclosure is on? Actually, I like the sound of the new house better.....
This is one of the furthermost lots away the highway, coupled with it being a lake front gives it premium price tag of $14k on top of the purchase price of the home. The foreclosure is on a corner lot at the end of the street(almost like the end of a cul-de-sac). The price on this type of lot would be less by about $6-8k since it is not lake front (even though it is a little larger).
I’d say if the older home is in good shape with no critical issues, it would be the better investment. The true value of a home is the location, they are both in the same area, same builder, I’d go with the older one, which is not old at all, the bottom line is, are the upgrades necessary right now or can it wait?
Ask yourself, is it worth financing an extra 80grand for these upgrades, do the math? Except for the lake view, you can’t change that, lol.
Ask yourself, is it worth financing an extra 80grand for these upgrades, do the math?
The fact that the HOA payment on the older house is $160 more than on the newer house should also figure into the math. $160 a month, over twenty years, adds up to almost $40,000. Just one more piece of the puzzle...
So, with the upgrades and lakefront lot, the difference is closer to $35K to get the newer house.....(less if you discount the HOA, tho you'll have to spend money on cable)
......and the newer house will have all new roof, appliances, windows, etc. for that $35K. Have you asked if the builder will offer any incentives ...... closing costs, etc.....that could even sweeten the deal further? I am a lake view person. Long ago learned that if I live in a neighborhood with a lake, golf course, etc. I am not happy unless my house has a premium lot. Would rather not live in a neighborhood with those things if I can't have a house with the view. But that is a very personal thing.......
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
