Buying A Home
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Buying a new house vs. pre-owned

Hello,

I've never posted to this forum before so Hi! My husband and I got married in July and are wanting to buy a house and move back to our hometown sometime between April and June (our lease ends mid-June). We were in our hometown scouting out price ranges and neighborhoods. He has been bugging me for months to put a down payment now and just rent it out until we want to move in June. This option stresses me out because what if we don't find renters, or what if our renters don't pay, or what if our renters move out, or worse, what if our renters trash the house.

While looking this weekend we came across a new development. The baseline package was about $9,000 under our budget, so we have about that much wiggle room for options and upgrades. The development is in the best school district in town (for our future babies) and our side of the street is the last to be built on so it's not like we will be staring at empty lots for months. I'd love some advice/experiences on buying new vs. pre-owned. My husband is freaking out about buying new, while I love the idea of being able to make it my own and move into a new neighborhood with younger people like ourselves. We have a $1000 refundable lot retainer down, but we have to decide by Sunday, or we don't get that back.

Re: Buying a new house vs. pre-owned

  • TBH, if you're only $9,000 under your budget on a new build before upgrades, you can't afford it.  $9,000 will go REAL  quick with a new home builder.

    For example, we bought our house new... and did it semi-custom, meaning we could change anything we wanted.  The base price was well under our original budget, but we ended up spending close to $70,000 in upgrades.  Most builders have everything in their "included" list as very bottom end stuff, so even if you want simple things, like oil rubbed bronze fixtures instead of cheap chrome, you'll pay a pretty penny for it.   

    However, one way to do it is to do the base line everything, and then upgrade as you go.  If you're handy, it's a good way to go.  I know of us, we aren't that handy nor do we have the time to do that, but some of our neighbors went that route.
  • Personally, I prefer older homes to new construction. At least in my area, they are better built and have a more interesting character. Our home is from 1966. It has had very few problems since we moved in. We don't mind a "retro" feel, but even if we redid everything we'd be saving money over a new home of the same size.

    Would you be happy with the base package only? Have you looked into the references of the construction company? Also, make sure to take any HOA fees into account in your budget.
    short+sassy
  • I agree about the HOA fees, they can be brutal, also gave the taxes been determined yet? Would you be happy without bells and whistles? Only you know that, I my area $9000 would maybe get you the upgraded flooring package but everything else including paint would be builders basic.
  • I looked up home-owners association fees and there are none. I made the builders send me a list of all the standard features and all the upgrade options with prices. We figured out we could stay in budget and be happy with a few upgrades (add door to Master bathroom, add tile in dining room and hallway, etc.). However, we get no backyard. I'm in Central California, which means we couldn't touch it until the drought is over anyway. It includes granite counter tops, GE stainless steel appliances, and the warranties on everything is enticing. Any stories of why you love your new home or your old home or why you decided against one of them?
  • Home warranties aren't all they are cracked up to be.  You are limited to using their preferred repair companies and they aren't always the best.

    That being said, if you buy a "used" house you can request a home warranty that will give you peace of mind for the first year.  If you want you can renew it after the one year, our would have cost about $500 for the policy if we had renewed it.

    I've lived in a new construction development and it was just okay.  The mess from construction, the dust, the torn up roads, the noise was pretty miserable.  The lots were small and the houses were right on top of one another.  I need more space than that personally.

    I also think that older homes are typically built more sturdy and with better space planning than the newer homes.  The new builders tend to throw them up as fast and cheap as possible.  Be sure to do your homework about the builder if you go the new build route.
    Formerly AprilH81
    photo composite_14153800476219jpg

  • julieanne912julieanne912
    Fifth Anniversary 500 Love Its 500 Comments Name Dropper
    member
    edited September 2015
    OP, where in Central CA are you and who is the builder?  I am from Visalia and my mom lives in Clovis.  I was in real estate there previously so I'm pretty familiar with the builders.

    I'm in CO now, and I've been watching Lennar and KB Home put up homes down the road from us.  It's scary how fast they build them.  Ours took forever, but it was with a small local builder and I'm glad they took their time.  We're also on over an acre so we don't have the houses on top of each other problem despite it being a new development.  The noise/dust is super annoying though, but we plan on being there a long time so will just suffer through til the neighborhood is done.
  • julieanne912julieanne912
    Fifth Anniversary 500 Love Its 500 Comments Name Dropper
    member
    edited September 2015
    Oh also forgot to say why we chose new.  We wanted a house on some land, but the houses we were finding in our price range on 2-5 acres were usually pretty dated, but not dated enough to do a total remodel... I'm talking like 1998 dated with oak cabinets and stuff we just didn't like aesthetically.  Many were also too big, one we looked at was 5000 sq ft with 5 bedrooms upstairs plus a full unfinished basement... we didn't need that much house and remodeling it would have cost a ton due to the size.  We ended up finding this development and compromising on the lot size down to 1 acre to be able to build from scratch.  Also my H is not handy at all, and while I am, we're just too busy with other commitments and activities and want to start a family, so we didn't want to be doing years of remodel work.  
  • When I bought in Florida I chose older because I didn't want to live in a cookie cutter subdivision, when DH and I got married we added an extension, updated the main house and added a pool. When we moved to NC we wanted at least an acre, no more than 2500 and less than a 30 minute commute. We found what we wanted in a 7 year old custom built foreclosure which was pretty much 75% perfect
  • While, granted,  I don't have much experience in this arena.  From what I've heard about new construction in a housing community with "base model" vs. "builder upgrades", it reminds me a lot of buying a new car with "base model" vs. "upgrades/packages".  It's like you add a few things and suddenly the price is substantially more...and you can often add those items "after market" for cheaper.

    I do own rental property and I wouldn't recommend buying a house so early that you need to rent it out for a 6-7 months.  Quite frankly, you would have a hard time finding tenants.  While you'll occasionally find an exception, most people don't want to move somewhere they will have to move back out of just a few months later.

    Plus, if you don't live in the area, you would need to either hire a property management (PM) firm/real estate agent (REA) for friends/family to conduct showings for you.  PMs often charge the first month's rent.  REAs often charge that also, but I've also seen them charge just a few hundred bucks. 

    However you all go, good luck with your home search!  

  • AprilZ81 said:
    Home warranties aren't all they are cracked up to be.  You are limited to using their preferred repair companies and they aren't always the best.

    That being said, if you buy a "used" house you can request a home warranty that will give you peace of mind for the first year.  If you want you can renew it after the one year, our would have cost about $500 for the policy if we had renewed it.

    I've lived in a new construction development and it was just okay.  The mess from construction, the dust, the torn up roads, the noise was pretty miserable.  The lots were small and the houses were right on top of one another.  I need more space than that personally.

    I also think that older homes are typically built more sturdy and with better space planning than the newer homes.  The new builders tend to throw them up as fast and cheap as possible.  Be sure to do your homework about the builder if you go the new build route.
    In this case she's talking about a new home warranty, which basically means if anything breaks in the first year, the builder has to come fix it.  Now, some builders are not great about doing this.  Ours has been good about it, but again, I've heard horror stories about builders refusing to come back to fix stuff.    
  • @julieanne - it's a new Wathen and Castanos home in northwest Visalia. DH and I are relocating back home from Fresno. 

    Thank you all for your input. It's helpful to know other people's perspectives
  • @julieanne - it's a new Wathen and Castanos home in northwest Visalia. DH and I are relocating back home from Fresno. 

    Thank you all for your input. It's helpful to know other people's perspectives
    How funny, small world.  Most of my old friends from school live in NW Visalia.  My mom had a Wathen Castanos home in Clovis near Buchanan High School and she was overall pretty happy with them.... that was about 13 years ago but I'd like to think they still build a quality home.    
  • @julieanne - it's a new Wathen and Castanos home in northwest Visalia. DH and I are relocating back home from Fresno. 

    Thank you all for your input. It's helpful to know other people's perspectives
    How funny, small world.  Most of my old friends from school live in NW Visalia.  My mom had a Wathen Castanos home in Clovis near Buchanan High School and she was overall pretty happy with them.... that was about 13 years ago but I'd like to think they still build a quality home.    

    That's so funny! I drive by Buchanan every day on the way to work! We love Fresno but after graduating from Fresno State, all our friends moved away and now we drive to Visalia every weekend to hang out with our family anyway.

    Wathen Castanos has good reviews and they've won awards for being such a green company. We talked to a few realtors today who only had good things to say about them. At this point we are leaning toward going for it. We asked for an extension to decide before losing our refundable lot reservation and got that and have an appointment to do a more extensive walk through the model home. Having another week has taken a lot of stress off since we have more time to do our homework.
  • I'm glad to see you got an extension nkjacobsma. We have had two homes built and were the contractors for our current home, we also bought on existing home, so I have quite a bit of experience under my belt and would be more than happy to help with any questions you have about building over buying an existing home. 
    The most important tip I can give someone building using a home building company is to check what any upgrade would cost you to do after you move in. This includes extras like lighting, kitchen sinks and such. Even changing the flooring can be less expensive to change after move in at times. Anything, that you feel you can do yourselves like that is often less expensive to do after you move in. Even when you have to hire someone to do the work because any "upgrade" dhanges you make to their basic home (other than choosing from their set choices) you are not only paying for the original, but for the upgrade too. And on top of that, if it's something they contract out, you're paying them for the trouble of having to hire someone else to do the job. 

    Case in point. The builder we used for our second home put a porcelain sink in the kitchen. I had one in a rental when we first married and it was horrible looking because of chips and scratches so we asked for a change to stainless. We paid $250.00 for a sink we later saw at a home improvement store for $19.99. Granted, you're not going to find a twenty dollar sink anymore, but the idea that we paid 12 and a half times for a new sink, that was actually less expensive than the one that would have been installed, we also paid for in the porcelain sink in the basic cost of the house plan we chose, . 

    That is one of the main reasons we decided this last time to be our own contractors and build a custom home. It's not for everyone, but after having two homes built and doing some DIY ourselves we knew we could do it.  
  • I looked up home-owners association fees and there are none. I made the builders send me a list of all the standard features and all the upgrade options with prices. We figured out we could stay in budget and be happy with a few upgrades (add door to Master bathroom, add tile in dining room and hallway, etc.). However, we get no backyard. I'm in Central California, which means we couldn't touch it until the drought is over anyway. It includes granite counter tops, GE stainless steel appliances, and the warranties on everything is enticing. Any stories of why you love your new home or your old home or why you decided against one of them?

    New construction homes are cheaply made. Any generic home with an average builder is not made with the best materials. The only way you get good stuff is to go custom. We built new in 2008. It was put up in 3 months. New construction homes go up in a few months using cheap materials and cheap labor - labor to just get the job done, not skilled workers who give a crud about what they are doing.

    Even if you do build new you still need an inspection done. Our inspector found the roof missing flashing the drainage problems in the back yard.

    I would never build new again. I look at all the new homes popping up around us - all shiny and quickly made (ones that are $300k +++) and would take an older home ANY DAY.

    My parents built new in 1983. It was, at that time, a run of the mill new build. But, it has been a great, sturdy, well-constructed home with wonderful materials built by people who cared. That's just not the case anymore.

    What ever you end up doing, do NOT build on a lot down hill from other lots still under construction, it's how you end up with major water flow problems.

  • As with anything new, houses, cars, electronics, there are quality products and there are, as MommyLiberty stated "cheaply made". Since the OP wrote "Wathen Castanos has good reviews and they've won awards for being such a green company. We talked to a few realtors today who only had good things to say about them. " I'd say she did her homework on whether or not this builder does quality work and she and her hubby should feel comfortable working with them. 
    julieanne912
  • As with anything new, houses, cars, electronics, there are quality products and there are, as MommyLiberty stated "cheaply made". Since the OP wrote "Wathen Castanos has good reviews and they've won awards for being such a green company. We talked to a few realtors today who only had good things to say about them. " I'd say she did her homework on whether or not this builder does quality work and she and her hubby should feel comfortable working with them. 
    Yup... my own mom had a Wathen home and it was nice!  

    And, our new home wasn't totally custom, but it was semi-custom.  We were, and still are, confident that our builder did a good job.  It helped that he is a local guy, we actually got to sit down with him in meetings, and he's been responsive to warranty repairs (nothing major) since closing.  Those big builders like Lennar, KB Home, etc etc are the ones to avoid IMO.  
  • We bought a 6 year old home that had been foreclosed on and had only been lived in for less than 5 years.  It was built by our neighbors who inherited the land, subdivided it into two plots, and built 2 houses themselves.  It's a fabulous home and in the 2 years we've lived here, we've had zero issues.  The other house's owners are original owners, and they've never had issues either, although they might be a little biased since they were hired to do the plumbing for both houses and decided to buy one.

    On the other hand, I know plenty of people who have bought new houses in the past 10 years and have had continued issues.  If you plan to buy new, just do tons of research to make sure the company is reliable and uses good materials like PPs have said.

    There are no guarantees with an old house either though.  It's hard to know what owners have done to the house to potentially ruin something.

    Always get an inspection either way.  And cross your fingers and wish for luck.

  • I'm glad to see you got an extension nkjacobsma. We have had two homes built and were the contractors for our current home, we also bought on existing home, so I have quite a bit of experience under my belt and would be more than happy to help with any questions you have about building over buying an existing home. 
    The most important tip I can give someone building using a home building company is to check what any upgrade would cost you to do after you move in. This includes extras like lighting, kitchen sinks and such. Even changing the flooring can be less expensive to change after move in at times. Anything, that you feel you can do yourselves like that is often less expensive to do after you move in. Even when you have to hire someone to do the work because any "upgrade" dhanges you make to their basic home (other than choosing from their set choices) you are not only paying for the original, but for the upgrade too. And on top of that, if it's something they contract out, you're paying them for the trouble of having to hire someone else to do the job. 

    Case in point. The builder we used for our second home put a porcelain sink in the kitchen. I had one in a rental when we first married and it was horrible looking because of chips and scratches so we asked for a change to stainless. We paid $250.00 for a sink we later saw at a home improvement store for $19.99. Granted, you're not going to find a twenty dollar sink anymore, but the idea that we paid 12 and a half times for a new sink, that was actually less expensive than the one that would have been installed, we also paid for in the porcelain sink in the basic cost of the house plan we chose, . 

    That is one of the main reasons we decided this last time to be our own contractors and build a custom home. It's not for everyone, but after having two homes built and doing some DIY ourselves we knew we could do it.  

    This is true. When we built our home they wanted and extra $5k (a deck was an upgrade option) to build a 12'x12' deck. If you know anything about decks, you know that 12' x 12' isn't very big at all - certainly not large enough for a grill and a table with 6 chairs.

    Anyway, we passed on that option and a year later DH built our own 16' x 20' deck for under $2k.

    When you're selecting options, do upgrades on the items you KNOW you cannot do on your own, ones that cannot be added easily at a later time, and ones you know you will USE. Another example was our master bath soaking tub. For that configuration we spent an extra $2,500. We used the tub maybe 5 times in 3 years before we moved. It was not worth it. If I had to do it again I would have opted for a standard shower/tub combo and do a double vanity with two sinks.

    Other words of advice:

    1. Plan and pay attention to the direction in which your doors swing open. They take off most of the doors in model homes. We didn't realize this and ended up with two doors in our laundry room banging into one another. Had we known this, would could have opted for one of the doors to be a pocket door and the problem wouldn't have existed.

    2. Upgrade your carpet and pad. Back to my PP, materials they use can be cheap. Therefore, you need to plan that carpet even one step up from the builder's base is probably going to look flat and bad in a few years especially in high traffic areas.

    3. Get a utility tub in your laundry room if that doesn't come included.

    4. Figure out where they are going to put things like light switches and thermostats. Sometimes you can find these things in weird places in the middle of walls. It's weird looking and also makes it tough to hang wall décor/art.

    5. Plan for adequate lighting. In our new build we added 7 recessed lights around the home to provide more light. It was awesome. For example, rather than one hall light upstairs, we did a recessed at the top of the stairs, at the linen closet and at the opposite end of the hallway. We did this on the main level in front of the hall closet and along and main foyer area too.

    6. Don't pay to upgrade your landscaping. It's a rip off. They typically plant things that are too close to the house and things that are not meant to be in the main front area of a home after a few years because they grow too large and block windows, etc..

    7. Plan for extra wall outlets (if not included already) at the mantle (if you have one) and one kitchen islands.

  • Thank you for all your awesome advice. We went to the design center yesterday to select all our upgrades and options. Besides the bay window we added, we have a week to make any changes, take any options off, or add anything.

    I'm taking your advice and going to be spending some time at Lowes this weekend looking at how much all this stuff will cost on my own. We are super happy with the stuff we pick and still stayed $6,000 under our budget after selecting all our options. We are in the middle of a drought in California right now so all they can put in is bark and a few "drought tolerant plants." So, that's kind of a con since our front yard will suck and our backyard will be kind of non-existent, but it'll only be about $100 to roll out grass in a couple years when the water situation gets better (and it'll save us money in the meantime!

    My experience yesterday was great because DH and I were able to focus on the stuff that was important to us and upgrade it.

    julieanne912short+sassy
  • edited October 2015
    Glad to hear my and others comments helped you and your hubby. 
    We just Skyped this evening with out daughter in Northern Cali. She said they had two days with a little rain and were so happy for it. Not anything to amount to much, but encouraging. I hope you get more soon. The water situation is terrible out there.  
  • DH and I built in our current neighborhood almost 10 years ago. It was near the top of our price range and we only upgraded one thing--to extend the little boat port into a large storage area. We have hardwood floors in the living room, tile in most areas, carpet in bedrooms. We also have tile countertops. Our subdivision was just beginning at the time. Fast forward to now, we HATE it. We spent over a year trying to sell our home, which was difficult. So many new homes, they all look alike. Property value didn't really increase. We FINALLY got a purchase agreement this past weekend. The house we are buying is in an older subdivision, much smaller. We can't wait. The yard is also much bigger and the house itself is bigger.
    My problem with these new developments is that they throw them up everywhere and the homes aren't special in anyway. They often build the same floor plan multiple times. That just isn't what we wanted. In the filing we live in, they were only building the same floor plan 3 times, but now in the newer filings they are building it multiple times. There is one that has 27 of the same house in the same filing. I think that is just crazy....

    But that's us. We wanted something with a large yard and more character. You can't get that in our are in these new subdivisions. It's all about what you want.

    Good luck with your decision!
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