New home worth the extra $$?

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vv19
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New home worth the extra $$?

Post by vv19 »

My wife and I are first time home buyers and started looking at houses this weekend and saw a couple of new houses which we really liked. The difference between a 10 year old house and a new house is about 25K (the older homes are in the 390-400K range the newer ones are in 415-425K range), do you think it's worth to pay the extra money for a new house? My reasoning is, for a 10 year old house, I will need to start shelling out money for repairs pretty soon (< 5 years). I'd appreciate any advice you guys can give. Thanks.
livesoft
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Re: New home worth the extra $$?

Post by livesoft »

Location is much more important. With a new home, one can choose finishing touches, but may need to pay more for landscaping and window treatments. A used home may have an established yard and the owners may sell the blinds, etc.

But location is much more important.

We bought a home that was about 1-year old. The owner was transferred out of state. We paid less than the original owner, plus we got the yard, the in-ground sprinkler system, and the windows treatments. This was about 20 years ago. We used the idea that the kitchen was not to our liking to negotiate lower and that the inside paint colors were not to our liking, so that the used home did not appeal to us as much as a nearby newer homes with the same floor plan.

A house should not need major repairs in the first 20 years. If it does that might speak to the quality of the place.
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texasdiver
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Re: New home worth the extra $$?

Post by texasdiver »

Last house my wife and I owned before the current one we bought new in 2003. By the time we were done finishing it out with all the stuff the builders didn't do I figure we poured an additional $25 grand into it: Landscaping, finishing out the closets, bathroom fixtures, window shades, patio, etc. etc.

Our current home we bought in 2008. It was built new in 2006. So far I haven't really had to put a dime into it other than replace the dishwasher when it went out.

I'd say that late model newish homes are pretty much the sweet spot. New enough to have up to date appliances and energy efficient construction. But someone else did all the work. Also private sellers are often much more eager to bargain than builders, especially the big builders, who may be willing to let a house sit empty rather than bring down the comps in a neighborhood they are building.
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vv19
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Re: New home worth the extra $$?

Post by vv19 »

Thanks for the replies. It's overwhelming for first time home buyers like us to which direction to take and how to make sure we're making the right decision. I do not mind spending the extra 25K if it makes sense, but don't want to pay for it only because it's new.

Back to the drawing board. :D
dickenjb
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Re: New home worth the extra $$?

Post by dickenjb »

Another wrinkle is if you buy new your wife gets to pick all the cabinets and colors and carpeting etc. May cost a lot for all the upgrades and upsells but she will be happy.
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Boomer01
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Re: New home worth the extra $$?

Post by Boomer01 »

It depends on if you can find an "ideal" used home for your family. Some homes may require small cosmetic changes like paint and others may need walls torn down or remodeling. The good thing about a new home is that you can design it exactly how you want it and it will be perfect when you move in. A new home should have at least a 1 year warranty on everything and you will get a significant discount on home insurance which tapers to full price after 7 years (at least this was the case with us). Usually a used home makes more financial sense, but you have to live there.
bungalow10
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Re: New home worth the extra $$?

Post by bungalow10 »

jay22 wrote:My wife and I are first time home buyers and started looking at houses this weekend and saw a couple of new houses which we really liked. The difference between a 10 year old house and a new house is about 25K (the older homes are in the 390-400K range the newer ones are in 415-425K range), do you think it's worth to pay the extra money for a new house? My reasoning is, for a 10 year old house, I will need to start shelling out money for repairs pretty soon (< 5 years). I'd appreciate any advice you guys can give. Thanks.

I always think of it the other way around. New homes generally don't have any updates or finishing touches. They may still have crappy builder flooring, window treatments (or none), immature landscaping. Owners often add stuff like crown molding, higher end faucets and fixtures, upgraded appliances. Usually the builder roof isn't very good, the windows aren't great.

Your best bet is to find a well cared for older house that is about 20 years old that recently had a new HVAC, windows, roof, etc.
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sls239
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Re: New home worth the extra $$?

Post by sls239 »

We've bought a new house, a 10 year old house, and a 20 year old house (in 3 different states).

But you don't just buy the house, you buy into the neighborhood. And 10 year old neighborhoods have a different feel than brand new ones.

Money-wise, I think getting the 10 year old house for 25K less is likely to be a money saver if the house was well built to begin with. And you get the chance to see for yourself how everything has held up over time.

For example if there is going to be water / drainage problems, it is pretty likely to show up in the first 10 years.
derosa
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Re: New home worth the extra $$?

Post by derosa »

So you have been looking at houses for about 3 days? You sound like you just saw a new car on a car dealers lot.

You haven't even touched the market my friend. You need to look for a few months - maybe every weekend.
ralph124cf
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Re: New home worth the extra $$?

Post by ralph124cf »

Are you moving from out of state for a job or something and need to make a quick decision? If not, I agree with the previous poster to take your time. You should probably look at something like 100 homes before coming to a decision. This is definitely likely to take you several months.

There are dozens of real estate sites detailing homes for sale.

Whatever home you decide you like, bargain hard. In real estate everything is negotiable.

Ralph
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vv19
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Re: New home worth the extra $$?

Post by vv19 »

ralph124cf wrote:Are you moving from out of state for a job or something and need to make a quick decision? If not, I agree with the previous poster to take your time. You should probably look at something like 100 homes before coming to a decision. This is definitely likely to take you several months.

There are dozens of real estate sites detailing homes for sale.

Whatever home you decide you like, bargain hard. In real estate everything is negotiable.

Ralph
derosa wrote:So you have been looking at houses for about 3 days? You sound like you just saw a new car on a car dealers lot.

You haven't even touched the market my friend. You need to look for a few months - maybe every weekend.
I am not ready to make a decision on the house. I was just wondering whether we should focus checking out newer houses at that price or not - that's all.
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Ged
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Re: New home worth the extra $$?

Post by Ged »

jay22 wrote: I am not ready to make a decision on the house. I was just wondering whether we should focus checking out newer houses at that price or not - that's all.
No, you should look at a lot of houses and maybe rent a couple until you decide what you really want.
DualIncomeNoDebt
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Re: New home worth the extra $$?

Post by DualIncomeNoDebt »

Location and layout is everything. Larger lot, space from neighbors, quiet, and privacy should be paramount. The quieter and more private, with some space from neighbors, the better. Ask some realtor friends how difficult it can be to unload a house with road noise problems, facing/abutting busy streets, undesirable businesses, noise, pollution, near a school if you don't want to be near kids, etc. You'll have one heck of a time unloading a house with problems; buyers won't even submit a bid.

After location, I generally prefer newer construction because of layout. Older homes, oftentimes the layouts are a very poor use of space, compared with modern homes which are open floor plan, much better use of space.
tibbitts
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Re: New home worth the extra $$?

Post by tibbitts »

If a home is truly new, as is not completed construction, you can pay for upgrades that will pay off in the long run and would be too expensive to add after building. But the value of that partly depends on whether you plan to remain in the house for a reasonable period.
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Phineas J. Whoopee
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Re: New home worth the extra $$?

Post by Phineas J. Whoopee »

Here's my take. For how long is the new home you're thinking of paying the extra $$ for going to stay new?

For example, I bought my home not new, but newly-renovated. That was seven years ago. Nobody would mistake it for newly-renovated today. Now it's clearly usedly-renovated.

I want to stay at least five more years, and preferably for the rest of my life. It won't be very new then.

So, perhaps like a new car that depreciates quickly, how much more money is the new newness worth when after not so very long a time it will be old new, that is to say, used, just like the less-expensive used homes?

Respond if you like, or take those as rhetorical questions.

PJW
livesoft
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Re: New home worth the extra $$?

Post by livesoft »

Just starting to look for a first home? Here's the livesoft buying guide. Worth even more today than when it was first published:
livesoft wrote:When we started looking to buy, we went to library and checked out the books. It was pretty straightforward. I would not buy a book unless it was in the $1 rack at the used book store.

And the idea of "evaluating windows" is kind of silly. Here's my criteria when I was looking for a home.

1. On a cul-de-sac near the end, but not at the end and not at the beginning.
2. Good schools.
3. Within 3 miles of my office.
4. Short walk from a water features like a pond or lake.
5. No tile countertops.
6. No bathroom doors visible from a seated position in any public room like den, kitchen, living room, game room, study, etc.
7. 4 bedrooms, at least 3 bathrooms.
8. Brick exterior, not stucco, not wood.
9. No major street within 2 blocks. (i.e. Interior cul-de-sac).
10. No chance of flooding, so must be on a ridge or high ground with good drainage even during a hurricane.

Surprisingly, these criteria eliminate about 98% of homes, so if the realtor is doing their job, you won't have to look at more than 1 or 2 homes. Notice that except for the countertop thing, there is nothing special about windows, insulation, appliances, etc. Those are small things that you can change. You can't change location and add a large pond or good schools where none exist.
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protagonist
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Re: New home worth the extra $$?

Post by protagonist »

jay22 wrote:My wife and I are first time home buyers and started looking at houses this weekend and saw a couple of new houses which we really liked. The difference between a 10 year old house and a new house is about 25K (the older homes are in the 390-400K range the newer ones are in 415-425K range), do you think it's worth to pay the extra money for a new house? My reasoning is, for a 10 year old house, I will need to start shelling out money for repairs pretty soon (< 5 years). I'd appreciate any advice you guys can give. Thanks.
Uh-oh. My home is 130 years old. Boy, am I in trouble.
denovo
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Re: New home worth the extra $$?

Post by denovo »

I would do some research on who the builders are for the newest homes, reputation, etc, obviously.
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