When beginning your home search in a hot market like Colorado Springs, there is a HUGE question you should ask yourself; do I want to buy a new build home, or a resale home? As a realtor here in Colorado Springs, most of my clients don’t know the answer to this question until they are under contract on their home.
This guide talks about the pros and cons of each, and I hope it will help narrow down your search to what you truly want in a home.
Resale Homes Pros & Cons:
•Cheaper purchase price: Because resale homes are not the brand new product, they are obviously cheaper. Although the upfront cost may not be as expensive, keep in mind the maintenance factor for big items such as an aging hot water heater, furnace, appliances, etc.
•More established neighborhoods: One of the great things about resale homes is that they are generally in already established neighborhoods, which will help bring us to the next point of...
•Lower property taxes (typically)- a result of purchasing a home in an already established neighborhood, is that your property taxes are usually significantly less. Property taxes are for building up communities, building schools, commercial areas, etc. so your property taxes could be less (sometimes hundreds of dollars per month cheaper).
•More bang for your buck, initially- obviously, having a lower price tag on a resale home means that you will be able to purchase more home with less money.
•Negotiable prices and terms- in a hot market like Colorado Springs, this point varies. If you truly love a particular resale home, you will need to be aggressive with your offer (if you had that warm feeling of ‘Wow I love this home!’ most likely, many other potential home buyers felt the same way about it)
•Requires more attention to detail- this is where paying for a home inspection(and finding a good home inspector) is crucial! Your home inspector will be able to point out flaws, varying from small things like out of commission outlets, to big things such as foundational cracks. The inspector is there to protect you in your purchase!
New Homes Pros & Cons:
•Brand new product- with new build homes, you are buying the top of the line in any market. Price per square foot is going to be higher, because everything you are getting is brand new!
•VA incentives (which can be used to pay off debt) can be as high as $15,000- This is my personal favorite part about new construction homes. Builders in Colorado Springs offer free money to buyers, and VA buyers can use this incentive to pay off debt (which I have used to help clients pay off $12,000 car loans, and get into a home $0 out of pocket), buy down their interest rate, and so much more!
•Home warranties are included- Most builders offer a 1 year "bumper to bumper" warranty, a 2 year systems warranty l, and a 10 year structural warranty! There WILL be flaws in any home, so when these issues may arise, it’s always great to have a warranty included with your home!
•More equity to be built, especially short term 1-5 years- Of course, resale homes build equity as well. However, new build homes for the first 5-10 years grow equity much quicker! In this market in the past 18 months alone, new build pricing has increased over $40,000!! If you are looking for a home for a year or two while being stationed in Colorado Springs, this may be the deciding factor for you.
•Higher property taxes- because they are building new infrastructure, new schools, and brand new parks in these new build communities, property taxes will fluctuate and will most likely be higher! Keep that in mind, but remember, you’re paying more, but you are more than likely going to build equity quicker.
•Higher payments- with a higher price tag, and higher property taxes, you will be spending more monthly in your mortgage payment.
•Base price cost of floor plans are ever changing(in this market, going up)- like I mentioned earlier, as long as the market keeps up the way it has, equity is not hard to grow in new build homes. I have had clients build a home in February, it’s not ready til August, and they move in with $20,000+ in equity. Crazy I know, but this is happening everywhere.
I hope you found this guide helpful! If you would like to know more about any of these points, or if you are ready to start looking at your home options enter your information in the form to the right and I will be in touch shortly to get you started.
You can view any home on the market at HomesBySathre.com.
