Mistakes to Avoid When purchasing a home in Atlanta
Buying a home is a big decision that takes into consideration many different wants and needs. In addition to determining basic parameters (such as square footage and price range), ... read more
As with almost everything else in real estate, there’s no simple answer to whether to buy a new or previously owned home. The best way to determine what kind of home will give you the most bang for your buck and also be the best fit for your needs requires taking a range of factors into account; the sticker price on the home is not the only thing financially-savvy homebuyers should consider.
If you’re in the market for a new (or new-to-you) Atlanta home, keep these key cost-related points of comparison in mind to help guide your decision on what type of home is most suitable for your financial situation.
The cost to build a single-family home varies greatly by region (and even zip code), but the national average to build a new, 2,470 square foot, two-story structure is $295,000, according to Fixr.com. On the other hand, the median sale price of an existing home in the South Census Region is about $219,200, according to the National Association of Realtors.
While it varies greatly depending on home size, location and the terms of your mortgage, in many cases, buying an existing home is often cheaper. With resale homes, there is often a greater opportunity to negotiate a lower sale price than with new construction.
While the sticker price may be cheaper on an older home, that initial price tag doesn’t take into account any needed fixes that often come along with buying a previously owned home that could increase the total cost of purchase. If you are planning to purchase an older home, get a property inspection to make sure these potential additional costs are within your budget.
New homes are unlikely to need any repairs for about seven years, and most significant costs should be covered under warranty. When you work with a new home builder, you also have the opportunity to customize your home during the building process — most will have options to add more closets, change the floor plan or upgrade appliances — which removes the need for any major renovations within your first several years in the home.
When buying any type of home, buyers should prepare as much as possible for the mortgage application process. A solid credit score and substantial down payment is the best way to secure a home loan from any lender at the most favorable terms for the borrower.
However, in some instances, it may be more difficult to secure approval for a new home loan than it would be for an older home. Since the financial crisis of 2008, stricter lending practices have become the norm among most respected lenders. Though banks and credit unions have become more willing to underwrite new home mortgages in recent years, borrowers should expect to have all their ducks in a row to get approval — especially if the home is brand new.
The location of a home has a significant impact on the value of the property. You can easily review the history of an older house’s value overtime on a range of home listing websites, which will help you determine whether the home you’re eyeing is a wise investment. These sites can also help you determine average home values by neighborhood, which can also help narrow down your search if you haven’t landed on the perfect property yet. The potential future property value of a newly built home can depend on a range of unknowns, like future construction in the area, which can be difficult to predict.
Newer homes are sometimes constructed in less established communities, as this is typically where the most undeveloped land can be found. This may mean you are farther away from schools, work, shopping centers and the places you’ll likely go in your day-to-day life. This is not only a lifestyle consideration: Numerous studies have shown long commutes have a negative effect on happiness, and purchasing a more remote home could also cost you more in gas and car repairs in the long-run.
But this isn’t always the case, as Atlanta builders are creating new neighborhoods in desirable and affordable communities throughout the region. Make a list of can’t-live-without nearby amenities to reference during your home search, especially if this is something that’s important to you when it comes to saving money — and precious time!
While these additional expenses shouldn’t be the determining factor in whether you purchase a new or existing home, they are still important to consider: