The Biggest Advantages of New Construction Homes versus Resale Homes

Here we go!  Let’s get down to brass tacks and discuss the advantages of new construction homes versus resale homes. 

For the interest of getting everyone on the same framework let’s first go over some definitions.  New construction homes are homes that are built and have never been lived in.  So as the buyer you will be the very first person or family to live in this home.  Resale homes are those that have already had someone live in that home and now that home is for sale.  One way to think about it is that every home out there will only be a new construction home once it its lifetime and once someone lives in that home it can now only be sold in the category called a resale homes.  Generally we think of new construction homes as those big developments we see going on such as Wolf Ranch, or Easton Park, or Circle C in southwest Austin.  But new construction homes are also built by smaller builders such as David Martin who builds Green homes and creates small communities such as his Casas Verdes in South Austin.   You can also see new construction homes that get built in existing neighborhoods when someone tears down a old house and rebuilds on the lot or when a builder buys an empty lot or lots and then builds new homes on it.  You can see some of this in east Austin or in the Tarrytown area west of Mopac when the economics makes sense.  So enough about this for now.  I just want you to realize that for the most part when we talk about new construction homes they will likely be in bigger developments but there are always other new homes being built that are not in those big developments.  I know you’ve likely seen both just driving around in the area.  

Advantage #1: Design your House from the Ground-Up to Fit Your Lifestyle or Get a Great Deal on a Spec-Home or Model Home

The very first advantage of a new construction home is going to be that you’re able to get a home where you get to decide and create the right space that fits your needs and your lifestyle.  Designing your home from the ground-up gives allows you the most freedom to make it like you want within your budget limits.  So do you like to entertain?  Then you’ll likely need an inviting kitchen that creates an instant gathering area and flows in an open area into a spacious living room.  For entertaining outdoors you might also want a covered patio where you can place your barbeque grill and have some shade and ceiling fans and then place a table here for your guests.  If you’re a dog person and your dog likes to be outside then you’re going to want a yard big enough for your dog but also one that has secure fencing so the dog won’t be able to get out from the yard.  If you enjoy having a staycation at home with your spouse and kids spending a nice weekend then you may want a back yard that is big enough for your kids to play and possible even for a pool.  I could go on and on but you get the point.  If you’re buying a home that has not yet been built then you’ll have the chance to design some elements of this home to fit your needs.  These homes are designed by real professionals that have received years of consumer feedback so they get better and better at knowing what buyers really want.  The big challenge with this is that what buyers want is constantly evolving and changing so builders have to also be keeping in tune and staying current.  The downside for being able to design your own home from the ground up is that it is going to take time to build this home and it could be a year or more from the time you first decide this is what you want.  

If you don’t have the time to wait for a home to be built from the ground up you can also find out which homes are already in the construction process.  Homes in the construction process are likely going to fall into two categories.  One is spec-home and one is model homes.  The “spec” in spec-home stands for “speculation.”  When a builder builds spec homes these will be homes that are designed with floorplans and amenities and paint schemes that are proven as desirable to buyers in that price range.  The builder starts building these homes without already knowing who is going to be buying the home.  As the buyer, you will be able to make changes or tweeks based on the progress that is already completed and based on the choices available.  So if you fall in love with a spec-home and the cabinets and countertops and faucets are already installed then it’s best to accept those items instead of trying to change them. However, if the interior of the house has not yet been painted and you didn’t really like the color scheme, then it’s reasonable to make some changes to that based on other available paint schemes.  The biggest advantage of the spec-home is that it is going to have enough amenities and be priced right so that it will “fly off the shelves,” – as the saying goes because it was only in the Wizard of Oz that we see a house flying.  The builder wants to sell these houses as soon as possible and you can get a great deal buying one of these houses either while it is still under construction or after the construction is completed.  

The other category is the model home.  The model home is a much more of a rare-bird than the spec home.  There will be lots of spec homes in a large development but there won’t be that many model homes.  The model home is the top dog.  It is the home that includes the most attractive floor plans and the nicest countertops, and the deep soak tub, the study, and the nicest yard, and the mud room as you enter from the garage.  These are all examples of what you can find in the model home but there are many more.  Many times, the model homes are used as the sales office or else the sales office will be right next to a model home so it is very easy to take you to see it.  The biggest advantage of buying the model home is that it has a ton of amenities and it is also one hundred percent completed.  Because it is completed that means the builder knows their exactly costs for this home and that in turn means you might be able to make an attractive offer that hits the sweet spot and the builder will find it hard to refuse.  Of course, this is more likely to happen when you hire a savvy Realtor to help you with the process – hint, hint!  

When you buy a resale home you’re going to be locked into the good and bad of the home.  It’s great when it’s all nice but not so great when it doesn’t work as well with your needs, your lifestyle or your budget.  I am sure we can all find the perfect resale home that fits all our needs and our lifestyle if we all had unlimited budgets and unlimited time to search.  The reality is 99 percent of us have budget limits and we have an idea on a time horizon when we want to be moving in.  New Construction homes give us a wide range of choices on style, amenities, location, price range, and time horizon to best fit what we want.  

Advantage #2: Energy Efficiency and Lower Utility Bills

The home I grew up in was built in 1917.  It didn’t have a central heater or central air-conditioner.  We used plug-in heaters in the winter time and I remember how the windows always seems to be full of condensation.  That wasn’t an energy efficient home but electricity was also a lot cheaper back then.  Nobody likes to see a high utility bill.  I recently had a $215 water bill on a property I own and it was probably caused by a leaking toilet.  It just goes to show how just one thing going bad or being inefficient can raise our bills and also waste our precious resources like water in my situation.  I hate to waste water or electricity or food and I am a person who recycles everything I can.  

No matter what your own personal reasons, you can rest assured that a new construction home is going to be a highly energy efficient home.  It won’t be hard to find EnergyStar rated appliances, energy rated windows, high efficiency heating ventilation and cooling (HVAC) units, low-flow toilets and faucets,  LED lighting, high-efficiency insulation, and doors/windows will have built-in weather stripping.  Just how much energy efficiency is designed into the home will depend on each builder and the products they use.  Some builders even advertise themselves as GREEN verified builders.  GREEN is a private program that used a point system based on the energy and resource conservation measures installed into the home.  Each home has to achieve a certain point value and then be certified by an authorized inspector before it can be given the GREEN label.  Even if the home is not certified as a GREEN home, it is possible that some components do qualify as GREEN components.  For example, your HVAC can be a 16 SEER system and that unit by itself can be considered a GREEN component even if other components in the home do not achieve the GREEN requirements.   By the way SEER stands for Seasonal Energy Efficiency Rating.  Regardless of whether or not your new construction home meets the GREEN certification, you’ll have the peace of mind knowing you are doing your part to conserve energy and our precious resources such as water.  One day if you decide to sell your home, you’ll be able to advertise it as an energy efficient home, a GREEN certified home, a home that includes GREEN components, or you may simply just show your utility bills to your prospective buyers!  

Consider how this compares to buying a resale home that is 10 or 20 more years old.  You might not have any of the energy efficient items as you’ll find in a new construction home or you might have some of those.  High cost items like kitchen appliances, water heaters, HVAC units and furnaces don’t last forever, and they eventually need to be replaced.  When you buy a resale home you’ll get whatever remaining life is left in those items.  Hopefully it is still many years, but it could be that some of those items are at the end of their useable life and there you are having to endure a costly replacement within a short amount of time living there.  With a new construction home, you know all these components were just recently installed and they have the great majority of their remaining useable life remaining.   This gives you more peace of mind that your buying a solid product with new components that will give you years of enjoyment.  

Advantage #3: Warranties

When you buy a resale home, it’s unlikely the seller is going to give you any warranties or guarantees on the home.  The seller will provide you a document they are required to fill out and give you.  This is called a seller’s disclosure.  This is an important document that requires the seller to check blocks and write in explanations for every major component of the home. The overall goal is for the seller to indicate any known problems they are aware of so you as the buyer can be fully informed.  The challenge with the seller’s disclosure is that many people are not meticulous in filling out this form and or they don’t take the necessary time to do a good job at filling it out.  Also, we have to realize that we don’t all agree as to what is a problem.  A faucet that leaks might be an annoyance to one owner, where it could be a big problem for another person.  Areas of standing water that form in the yard after it rains could be something normal to someone while they are a big problem to someone else.  So you have to realize there will be some things that you truly don’t know about the home until you buy it and start living there.  You also have to acknowledge that even a trained home inspector won’t be able to find every single thing that can be possible wrong with a home in a 1 or 2 hour inspection.  In most cases the resale home will be sold in an “As-Is” condition.  In this situation they seller is telling the buyer the home is being sold in its current condition and the seller is not required to make any repairs.  In some of these situations the seller might stick to his stance completely and refuse to make any repairs.  Or the seller may decide to fix the most glaring deficiencies found by your home inspector simply as a sign of good will and cooperation and to help ensure the sale goes through.  But why even deal with any of that when, instead, you can buy a new construction home where every component of the home is new?  Plus if something does go wrong, you’ll always have the assurance knowing that all you need to do to get it fixed is to call the warranty company.  They will send a trained professional to your house to come fix it. 

Advantage #4: Price Plus Location

Advantage #5: Drive-to-Economy

An economist from Realtor.com named, George Raitu, recently developed a phrase called, “drive-to-economy.”  He explained it on a recent interview I saw with him on ListReports.com  George explained how our country’s low gasoline prices have combined with the new work-from-home phenomena and  created the ability for people to live further and further away from their physical work location.  Here in the Austin metro area the furthest northern edges of the connected metro area was Round Rock in the north.  But now when as you drive northward on IH-35 it appears that Round Rock and Georgetown are connected.  I’ve seen the same thing happen in the Houston area with Katy and Houston proper.  Just twenty years ago there was a physical separation of fields and pastures between Katy and Houston but now there is no more open land in between, so before you know it you will be driving east past Katy and then you are in Houston.  This kind of sense of connection also impacts what people view as a reasonable distance to live away from work.  What is the farthest that you would consider living from your work location?  Is it 20 miles, 30 miles, or even further?  Consider the distance from Wolf Ranch in Georgetown to downtown Austin is about   

Advantage #6: High-tech Built-Ins and Modern Needs Met

Advantage #7: Safe to Visit and Easy to See and Easy to Buy

Advantage #8: Plenty of Houses to Choose From

Have you seen all those lists that tell you the top 10 cities to live in for millenials, or the top 10 cities to live in for cost of living, or the top 10 cities to live in for lifestyle?  I’m sure you’ve seen some of these and you’ve noticed that Austin is usually in the top or near the top of these lists.  You’ve also heard the figure that 100 people move to the Austin area every day.  That figure is actually a net gain figure that takes the number that move in and subtracts the number that move out and the net gain is the 100.  You’ve also heard about the migration of people coming to all parts of Texas from states like California and New York.  Plus it’s no secret that companies are moving their headquarters into Texas.  I recently saw an article that discussed this in depth.  I also saw an interview with the CEO that moved his company from the San Francisco Bay area to Texas.  With all this kind of news going on, its certain that home builders of all sizes have heard these news stories and they have someone in their company who is responsible for keeping abreast of these demographic trends.  These builders know there is no such thing as “built-it-and-they-will-come” like in the Field of Dreams movie.  These savvy builders know if they built it where nobody wants to live they are going to be out to left field.  But if they built it where people are moving to and most want to live, then they are setting themselves up for greater success.  That is what is going on in Texas.  Builders are going like gangbusters in all the metropolitan areas like Houston, Dallas-Forth Worth, Austin, San Antonio and even in far west Texas in El Paso.  [If fact I used to live in El Paso and I lived on the east side.  Back then when you went east of Lee Trevino Boulevard you were only a few streets away from the eastern limits of the city.  Now it seems like Lee Trevino Boulevard is no where close to the edge of the city and that was only about 22 years ago!]   I also read an article recently that was about Texas demographics and associated trends.  It mentioned that if you look at a map of Texas and use Dallas-Forth Worth being one point, and then Houston as the second point, and then San Antonio as the third point and then you connect all those lines you will have drawn a triangular area that includes 70 percent of the population of the entire state!  What is even a little bit scary is that this population percentage inside the triangle only increases over time.   

What does all of this mean for you as a prospective buyer of a new construction home?  It means that builders are out there every day working hard to build new homes for people just like you.  They know about you and your demographics and they have studied you over many years.  They know what you want in a home, they know what makes it attractive to you, where you want to live and they know what price ranges you can most afford.  The chances of your ability to find a new construction home that you will love and fits your budget is going to be very possible.  For Realtors we are allowed to create our own branded version of this website: NewHomeSourceProfessional.com.  This is a website that is owned and operated by a cooperation amongst many of the nations top home builders.  These home builders have their homes listed on this site and they update the information as often as daily.