Limited options

While you do get to customize, there are far from limitless options dictating your choices. For example, you won’t be able to add a sunroom that isn’t listed as an option on the original plans or choose a different placement for the fireplace. Many builders will only let you choose between one or two paint colors for all of your interior walls, so if you want anything different, that’s a project you’ll have to take on after the home is built and closed on. In some cases, you will be able to purchase options such as different appliances outside of the buyer and have them installed (usually at a premium) with the general construction. But for things like countertops and carpeting, you’ll likely only be able to choose among the options presented by the builder.

Upgrades are Not cheap

The first price you see when choosing a new construction home is the base price of the property. This includes the structure itself (without any optional add-ons, like extra bedrooms or first floor bump outs), and may also include things like the lot the home will sit on and the landscaping that will surround it – or not. It also includes all the standard finishes, which are often not the best looking or highest quality options. To get your house looking how you want it, you’re going to have to choose some upgrades, and those will quickly make the price of your home go up. Things like wood floors instead of carpet, recessed lighting, fireplaces, and updated kitchens are all going to add on to the cost of your home in big ways. It already costs about 20% more to buy a new construction home than an existing one, so factor in additional costs and be conscious about finding a balance between getting the things that you want and staying within your budget.

Less room for negotiating

When you’re buying a pre-owned home, the price is set by the market and by the previous home owner, who may or may not understand the true value of their home. For that reason, negotiating is just part of the process, and it’s totally rational to expect that you’ll pay less than the price that you see on the listing, provided there isn’t competition for the property. When you’re buying new construction, however, what you see is typically what you’re going to pay, plus any upgrades. Builders don’t like to lower the base prices on homes because that alters the comps of the development and will result in more buyers looking for ways to negotiate down. They may, however, offer some discounts or financial incentives, so look for those instead of expecting to convince a builder to lower their price.

Advantages to Buying a New Home

Possibility of Customization – Buying a new home often allows buyers to completely customize it anywhere from selecting paint colors, flooring, trim, bathroom tiles to a dream chef’s kitchen. If you have a specific case and know exactly what you want your dream home to look like this is definitely an option for you. Upgrades can be financed into the mortgage.

Ideal Floor Plan – Buyers can work closely with the builders and request modifications on the number of bedrooms and bathrooms and even garage spaces that will be the best fit for your needs. New construction houses also tend to have much larger and brighter bedrooms and bathrooms for storage in comparison to older houses.

Match Today’s Lifestyle – New homes are designed to satisfy the needs and demands of today’s luxury lifestyles. Larger bedrooms and bathrooms, more storage, open floor plans, eat in kitchens are just a few items on the list. New homes come with the latest technology systems such as, built-in speakers and control systems to fiber wiring which are standard in most new construction.

Untouched – The most obvious benefit of buying a new home is the fact that everything in the house is brand new, covered by warranties, and that no one has lived there before. Being the first person/family to live at the house is very appealing to many buyers.

Less maintenance costs in the first few years – New homes aren’t necessarily impervious to needing repairs, but the chances of having to fix a leaky roof or a broken pipe are significantly lower, meaning less stress and less money spent while everything is still new. In addition, most builders include a range of warranties with their homes, which may include a short-term full structure warranty and a longer-term exterior warranty. It’s a big financial benefit, and a nice relief in the years following such a major purchase.

Amenities – New communities are often well-planed and offer a variety of great amenities including community pools, tennis courts, parks, and hiking trails.

Technology – These new construction homes come armed with modern technology. These homes can easily be connected to voice control systems that helps you be in full control of the house without touching of a button.

Healthy - New homes use low or zero VOC (volatile organic compounds) in their building materials and paints which makes for a better air quality.

Easier to Buy - Buying new construction tends to be less competitive because there are more units to choose from and even if one house gets sold there are others available.

Builder Warranty - New homes are covered under builder warranty. If you don’t want to worry about costly roof repairs or rewiring the house, you should be definitely consider new home.

In California, builders are required to give buyers a 10-year warranty. The first line of defense is to buy from a reputable builder who will agree to stand behind the structure and its components.

New Landscaping - New home will have a new fresh landscaping appearance meaning trees have smaller roots for possibly damaging sewage and water systems. Just another thing you don’t need to worry about.

Fire Safety – New construction houses must meet stricter building codes such as requiring hard wired smoke detectors that run on the electricity. You no longer need to worry about replacing a batteries or annoying beeping.

Little Maintenance – New construction is meant to last for a while, so new-home owners are not likely to install a new roof or replace the water heater. At least not for 10 to 20 years.

Modern Conveniences – Many items are standard such as built-in dishwashers, refrigerators, microwaves, and wine coolers. The homes can feature master suite baths, workout and media rooms. Their wiring systems are networked.

Energy Efficiency – Many homes are built with solar panels that purport to save money on electricity. New appliances use less energy. Walls, ceilings, ​and floors are insulated. Dual pane windows retain more heat in winter and keep the home cooler in summer. They also feature dual-flush toilets, smart thermostats, and LED lighting.

Built to Code – Code regulations change all the time. Consumer safety issues are continually addressed in new construction and conform to current building codes.

Emotional Factor of Newness – Let's face it, there's nothing like owning something that's brand new and has never been used, whether that's an automobile or a home.

Less Expensive – If the new home is not custom, it's likely to cost much less per square foot than an older home in an established city/area. Many younger buyers do not mind a longer commute to work in exchange for a new home.

Greater Average Square Footage – It's typical to see two-bedroom homes with 1,000 square feet sell for the same as a two-story, 2,500 square foot home in the suburbs. When builders can't build out, they build up.

Disadvantages to Buying a New Home

• More expensive than buying an existing home
• Location is probably not ideal
• Despite being new, workmanship might be questionable
• Could be subject to costly HOAs and Mello Roos taxes on top of property taxes (even if it’s a house)
• Neighborhood dynamic are unknown
• Property values may be more volatile
• Construction nearby (eyesore and noisy)
• More cookie-cutter style and less unique homes
• Tract Homes Have Similar Floor Plans – Some say tract homes are identical to each other and they have no individuality. Others prefer areas of conforming homes.
• Immature Vegetation – It can take years for trees to grow. Usually newer homes have landscaped front yards. However, most back yards will not have any landscaping and you should consider this cost.
• House Settling – New houses settle. It happens everywhere, regardless of the type of soil. Settling causes cracks in foundations, walls and door frames. Builders can be slow to respond to warranty repair requests.
• Longer Commuting Distances to work – The new home community may be located far from your work and you should consider if you are ok with the long commute, rush-hour traffic and time involved going back and forth.

Advantages to Buying an Older Existing Home

• Possibly less expensive
• Better, more central location
• Can buy in an established school district
• Can own in a more reputable and recognized neighborhood
• May have new upgrades
• You can always renovate if need
• Tend to have more character and custom design
• Can actually be built better than a new home
• Old-World Construction – Older homes have stood for decades, some centuries, and weathered many storms. Some were built by hand by genuine craftsman with meticulous attention to detail. You will often hear people say: They don't make them like they used to. It is true.
• Larger Yard – Years ago, when land was cheaper, builders built on larger lot sizes, leaving room to accommodate garages, pools, guest houses, RV access and alleys.
• More Character – Craftsman bungalows originated in California in the 1890s, but now they're ubiquitous across the U.S. Other popular styles are Victorians, Greek Revivals, Tudors or Colonials. Interesting architectural features are abundant in these homes such as arches, hand-carved decorative appointments, or stained-glass windows.
• Longer-Term Neighbors – Some older homes are passed down through generations. Many neighbors know each other. The neighborhood might be deemed historic.
• Established Neighborhood – Zoning changes are unlikely to occur in older areas.
• Mature Trees and Vegetation – It's not uncommon to see 50 to 100-year old trees providing canopies in yards and streets.
• Closer to Downtown Entertainment and Restaurants – Not only do older areas tend to be located closer to downtown areas, but often residents can walk to local coffeehouses, antique stores, and restaurants.

Disadvantages to Buying an Older Existing Home

• Harder to find an existing home (less inventory)
• May have major problems you don’t initially notice
• Financing could be tricky, if there are unpermitted additions, work, etc.
• Could still be more expensive than buying new
• Fewer amenities
• The neighborhood may be in decline
• More competition to get your purchase offer accepted
• You may have to settle for a smaller, less ideal home to get right location
• More Maintenance – With older homes things tend to go wrong periodically, and there's always something to fix; chimneys, stone foundations, squeaky floors, plumbing, etc.
• Expensive to Replace Plumbing and Wiring – Some older homes may not be connected to the city sewer system and have underground septic tanks that need to be maintained. There may be tree roots getting into the older sewer piping that will eventually cause blockages and also damage the pipes, therefore needing replacing which is costly. Also, older galvanized water supply pipes are rust-prone and prone to calcium build-up and eventually causing the water pressure to drop. Sensitive electronics require grounded wiring and some older homes don’t have ground wires. Wiring may also be the old aluminum type which is often dangerous.
• Smaller Closets, Storage Space, and Garages – Before today's concept of "bigger is better," people had less clothing, fewer personal items to store, and only one vehicle. Nowadays, most people like to have several closets and ample storage spaces throughout and a garage.
• May Require Updates – such as HVAC systems, kitchens, bathrooms, efficient appliances, dual-pane windows, etc.
• Often More Expensive – Classic and vintage homes generally cost more because of the location, meaning they are closer to conveniences such as schools, mass transit, shopping, and urban amenities.
• Smaller Average square footage – With the exception of estates, many older homes are smaller in size, even though family sizes were larger when they were built.