Is it Better to Buy or Build?
To buy, or not to buy? Ah, That is the question.
It's a question that many young families have. There
is a lot to consider:
- Maintenance cost. New homes typically
have a higher sales price than
comparable existing homes, but buyers are willing
to spend more upfront with the understanding that
part of what they are paying for is lower maintenance
costs. New homes come with a builder's warranty,
a brand-new roof, new appliances, new furnace and
other systems that typically make major repairs
unnecessary. However, data from the U.S. Census
Bureau's 1991 American Housing Survey suggest that
operating costs per house are lowest for brand-new
homes, slightly higher for relatively new existing
homes but lower on average for
older existing homes.
- Seeing the neighborhood, not imagining
it . When you buy an existing home, you
can find out a lot more about the property and the
neighborhood before you buy than when you buy a
new home that is in a still-developing neighborhood.
- What's down the road? Land for
new-home developments usually is located on the
outskirts of town. Potential buyers should ask the
developer about future access to
public transit, entertainment activities, shopping
centers, churches and schools. Find out how far
it is to the nearest library, for example. Once
again, an existing neighborhood answers these questions
for you right away.
- Location, Location, Location.
With a new housing development, you have to really
watch the local zoning ordinances. A rather remote
area can turn into a fast-food-chain haven within
a couple of years. What is projected to be a new
neighborhood might sprawl out of control, surrounding
you with liquor stores, factories, etc. One survey
by the National
Association of Realtors shows that resale homes
do have an edge over new homes. The trade group's
figures show the median price of resale homes increased
3 percent between 1994 and 1995, compared to 0.8
percent for new homes in the same period.
Ultimately, only you can decide whether to buy or
build. But, an honest realtor can help you learn what
questions to ask, and can help you find the answers.
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