In today’s real estate market, we are finding that existing home prices are becoming competitive to new construction home prices due to several factors. Many of my clients sit on the fence as they are told by many to purchase an existing home, there is a better value. As a real estate agent with the opportunity to sell both existing homes and new construction, I beg to differ in the value in this current market place, here is why.
As a real estate agent, when I encounter an existing home, I am looking at the potential issues that a future buyer will foresee or what is the condition. These all come into play when you are in a low inventory market as you are competing against new construction depending on your price point. The low inventory level is driving up the existing home values, upwards from 5 years ago, so when you consider the problems you are taking on, new construction maybe your best options and therefore, make the cost difference obsolete.
What are variables that maybe potential costly problems for the buyer down the road on an existing home. Age of the mechanicals, roof or appliances, wow, have you looked at the cost of replacement? When you consider Murphy’s Law, when something can go wrong it will. If you are my client, I always say, when I hand you the keys to the existing home, if the refrigerator or the furnace goes out the first time you walk in the door after closing, it is now your problem. After a buyer has saved for a down payment, closing costs, home essentials and new furniture/accessories, I promise, they don’t like knowing the cost of repair or replacement of these items. Sure, there are home warranties with limitations, whereas, with new construction, you have warranties on the workmanship, the mechanicals, the appliances, the plumbing, electrical and structure of the home. One phone call and you can have a repair or a replacement that costs you zero.
Design of a home, when clients are walking through an existing home, they have ideas of how they can modify the floor plan to meet their family needs. Without having a contractor to come look at the project, there is no way of knowing if the home will support the modification or what cost will be incurred. I always say, once you tear down an existing wall, this is when the truth comes out. You can see the bare bones of what time has done to the home. Has the home aged gracefully, or has a slow leak ate away at the beauty of the home? A solution is to design a custom home that meets your current needs so that you can move in without the hassle of renovation.
This is just a few of the factors…not even touching on the cosmetic items such as carpet. Everyone’s definition of if it’s not broke don’t fix is different so you will see varying degrees of conditions per property. Before you rule out new construction, looking at what is being offered in your price point would be a good idea! You will thank me next time you see me! Contact Michael Lee Inc today at 651-271-5470 to learn more about available lots and our Easton Village community!
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