Michaela Phillips, Guaranteed Rate, Inc.
DENVER – Across the Front Range, competing offers, cash payments and a lightning-fast housing market have become the norm, creating headaches for buyers and comfort for sellers. To avoid some of this stress, buyers are increasingly opting to purchase new construction properties instead of resales. Here are some things to keep in mind when making the decision:
PROS
Fewer competing offers
One of the most frustrating aspects of trying to purchase in metro Denver’s seller’s market is the bidding war created by limited inventory and huge demand. However, when you are the one constructing the property, there will only be one offer on the table – yours – so you can focus your energy on other things, like picking the perfect backsplash tile.
Customize it
If you’ve always wanted those granite countertops, cherry hardwood floors, or crown molding, now’s your chance. You’re in the driver’s seat when it comes to selecting finishes, flooring, cabinetry, etc. This is perfect for buyers who can’t get enough of all those little details that make a house a home.
Timing
Often when a buyer goes under contract on a new construction, the property hasn’t been built yet. It can take six months to a year for a property to be completed, giving the buyer plenty of time to save money or sell a current residence without feeling time-crunched or pressured to sell quickly.
Low-maintenance
Moving into a home that’s been previously owned usually comes with a laundry list of small and large repairs and upgrades. In a recently constructed property with new appliances, you can generally rest assured that things will work the way they should, and if something breaks, you can usually rely on your warranty to cover repairs.
Energy efficient
Newly constructed homes with updated appliances, insulation and air sealing, lighting, space heating and cooling, water heating, and windows and doors optimize energy efficiency and can reduce utility bills. This is a major pro, especially if you’re earnestly trying to reduce your carbon footprint.
Appreciation
The new property can actually appreciate while the buyer is waiting for it to be built, so you could move in with some instant equity. Score!
CONS
Hidden expenses
Taxes and fees, landscaping, window well coverings, a new mailbox – unforeseen costs like these can add up quickly. Protect yourself by planning ahead of time to avoid surprises and set aside an emergency fund just in case.
Delays
Weather can delay new construction and throw the builder off schedule. With the unpredictable weather we experience here in Colorado, it’s important to be flexible and build extra time into the construction timeline in case of unforeseen setbacks.
Resale
In a large neighborhood with many new construction properties, the builder may still be adding new homes when you are ready to sell yours. This could hurt your ability to sell your new home down the road, but does not make it impossible.
There is a lot to consider when deciding between purchasing a re-sale and a new property, but it ultimately boils down to your timeframe, budget, and patience. Thinking about buying real estate in the near future and need some additional assistance?
Michaela Phillips is the Vice President of Mortgage Lending at Guaranteed Rate, Inc., the 8th largest retail mortgage company in the country. Since entering the mortgage industry in 1994, she’s consistently been a top producer. Being a VP at Guaranteed Rate offers many advantages to her and her clients including unparalleled customer service, efficiency, and most importantly competitive rates. Contact Michaela via e-mail at [email protected]. NMLS: 312874.
By Michaela Phillips, Guaranteed Rate Inc.
