Why Some New Homes Cost Less Than Existing Ones
Traditionally, new homes cost more than old or existing ones. New homes' durability, energy efficiency, and low maintenance are some of the reasons for their value. However, cases exist of new homes that cost less than existing ones.
Reasons for the Anomaly
Various things can trigger the pricing anomaly; below are some of them.
Entry-level Properties
Existing homes can cost more than new homes in areas where builders focus on entry-level homes. Consider a neighborhood or city where most prospective buyers are looking for their first homes and can only afford entry-level properties. Whenever developers build what the market demands, existing homes that are not entry-level will cost more than the new homes.
Small Lots
In some places, builders have developed nearly all the areas earmarked for residential properties. If the few remaining lots might not support sizable properties, the new developments might have smaller lots than the existing ones. The existing homes might attract higher prices than the new ones because of the lot size differences.
Established Neighborhoods
Lastly, some established neighborhoods have charming houses that contemporary builders rarely replicate. For example, some of these houses are spacious, have high ceilings, large windows, and architectural styles not common today. Such houses usually attract higher prices than new homes in contemporary styles.
How to Find Such New Homes
Many new homes still cost more than existing ones. Therefore, you must work harder to find a new home that costs less than older homes. The following tips can help.
Use Builder-Preferred Lenders
Many builders have established relationships with lenders that afford them preferential mortgage rates. The low rates lower the overall cost of purchase. In addition, the builder may give you a good deal on the house if you work with their preferred lender. Some builders do this because they know such transactions don't delay.
Minimize Customizations
Builders often offer multiple customization options for their new constructions. For example, a builder developing houses with slate countertops may allow you to get the more expensive marble countertops. Limit such customizations; the more standard choices you take, the lower your final price will be.
Buy Early or Late
Time your purchase right to get a good price. For example, you may get a good price if you buy early in development when the builder still needs money to finish the rest of the houses. You may also get a good price if you buy late when the developer has recouped their investment.
For more info, contact a local real estate agent.
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