Whether you’re a first-time buyer thirsting for knowledge or a resale homeowner eager to learn more about newly built homes, it’s best to start with an understanding of the differences between a new construction home (for our purposes, a new home) and a previously-owned or resale home.
You can define these properties based on how they differ in four key areas:
Construction Quality
Quality of construction is the number one attribute for homebuyers when they’re ready to purchase a home. New homes today are built with state-of-the-art products, techniques, and materials that must meet the latest building codes enacted by states and localities.
Regardless of your budget, your new home will typically include important safety features such as smoke detectors, ground-fault circuit breakers that reduce the risk of electrical shock, lead-free paint and even an exit from your basement. Homebuyers can rest easy knowing that the accumulated wear and tear associated with a resale house is not an issue with a new home.
Want more peace of mind?
Inspections are conducted at no added cost to new homebuyers at multiple points during the construction process, so you can be confident that the latest building codes for electrical work, plumbing, and energy-efficient features, including insulation, are being carefully met in your home.
Low Cost of Ownership
One factor to consider is lower initial costs. “Most builders pay some closing costs, so buyers need less cash upfront,” says Lind Goodman, sales manager for Builder Services, Inc., a division of the Allen Tate Co. in Charlotte, N.C. “Sellers don’t always pay closing costs. Builders also provide a move-in package with appliances, so buyers don’t need to worry about buying big items right away.” Goodman also points out that loan programs with zero down payment or low down payment requirements can be used on new construction as well as resales.
New homes are built in accordance with the latest building codes and regulations, often including new technologies and energy efficiencies, which result in lower utility bills and saving more money over time.
In fact, according to the U.S. Department of Energy, a new home today is 30 percent more energy efficient that a home built just five to seven years ago. How would you invest these significant cost savings? A family vacation? The kids’ college fund? Retirement savings? Your favorite charity? Or perhaps a mix of the above? The point is that new homes give you those savings and choices.
New homes typically don’t require the maintenance, repair, and upgrades a pre-owned home might need before move-in or during the first years of homeownership, which will save first-time buyers time and money and reduce any stress about taking care of a home.
New homes also offer peace of mind since all products (and the home itself) are typically covered by a warranty. Most builders offer warranties on their homes, often one or two years on systems and materials and ten years for the structure.
In sharp contrast, when you buy an older home, you need to factor in the remaining lifecycle of your appliances, water heater, heating and air conditioning system and other costly and vital components. Plus, unlike in a resale, where you have to negotiate to fix anything a home inspector finds, an inspection on a new home produces a punch list of little things that the builder fixes before you move in.
“A new home will be built with the best products available in today’s market including the best and latest technology,” Ryland Homes’ Diane Morrison, national vice president of sales and marketing, says. “People often don’t understand what it takes to maintain a home, so when they’re comparing a new home with a used home they may not realize how much more cash it can take to maintain an older home and to replace systems as they wear out.”
Designed for the Way We Live Today
Homes designed decades ago met the needs of buyers at that time, such as a formal living room and a separate formal dining room. It was also a time when homeowners would accept a single, shared bathroom on the upper level for three bedrooms.
Today’s homebuyers prefer an open floor plan, often without a formal living room. New homes are almost 1,000 sq. ft. bigger than the average pre-existing home, and even the smallest new home typically has a private owner’s bath along with a full bath shared by other bedrooms. Some new homes even offer a private bath for each bedroom.
Also frequently included are multi-generational living spaces, spacious and open kitchens that satisfy inner Iron Chefs and customizable areas ready for transformation into libraries, studies or sunrooms.
Buying a new home means that you can choose the floor plan that meets your needs — no need for expensive, stressful remodeling jobs later on! — and you can often customize the layout or features to further personalize the space.
New and practical ways to use areas of your home, such as the entrance from the garage, have gained importance. Modern busy families often want a so-called drop zone space to store backpacks and sports equipment or a charging station for their smartphones, tablets, and laptops. You can plan out the storage space in your new home so that your possessions are easily accessible, yet out of sight.
Overall, designing a new home to suit your family now and in the future makes it more likely that you’ll stay there longer, and not having to move again soon can save money in the long run.
“We downsized by about 700 square feet but our new house seems like it has twice as much space because it has an open floor plan and every inch of space is utilized,” says Jenny Pauline Mendoza, a buyer with McCaffrey Homes in Clovis, California. “Plus this place has tons of storage. Our 1950s house didn’t have much storage at all.”
Some homebuyers who love to entertain create a catering kitchen or a party prep area outside of the main kitchen with special shelves for platters and punchbowls, extra glasses, and even a beverage cooler or additional refrigerator to accommodate large gatherings. Other buyers have their new home hardwired or designed to accommodate the latest wireless technology for home automation, networking, and security. You can adapt a new home to your needs now and allow for flexibility for the future.
In many regions of the country, first-floor owner’s suites are extremely popular and found in nearly every new home. In other areas, buyers are opting for a first-floor bedroom suite with a private full bath and a walk-in closet along with an upper level owner’s suite. The first-floor space can be used as a guest room, for older parents in a multi-generation household, or as a future owner’s suite if the homeowners want to age-in-place.
Best of all, if you prefer that traditional floor plan with a formal living room and a formal dining room, you can opt for that, too; but with the benefit of all new materials, a kitchen that’s never been cooked in, and sparkling new baths with your choice of finishes.
Personalizing a new home is one of the most fun parts of the homebuying process and helps transform your living space into a serene and comfortable retreat, tailored to your lifestyle and personal tastes. Even quick move-in homes (offered by production builders, but are already completely built or close to being complete) allow personalization that makes a home truly yours.
New homes cost less per square foot than older houses anyway, so choosing new construction homes maximizes your investment while saving time and money over the life of your home. The best value for your buck AND you can create the customized home of your dreams — what more could one ask for?
Energy Efficiency
Many new homes include Energy Star-rated appliances that can reduce use of electricity or gas and lower your utility bills. But Energy Star appliances are only the tip of the iceberg when it comes to energy-efficient features in new homes.
Houses today are constructed from the beginning with features such as energy-efficient windows and more insulation, which can improve air quality. New furnaces, air conditioning systems, and heat pumps are far more effective than heating and cooling systems from the past.
Homebuyers can use the HERS Index (Home Energy Rating System) to learn more about the energy efficiency of their new home. According to the website for RESNET (Residential Energy Services Network), a HERS performance score is generated by an assessment by a certified Home Energy Rater. A lower HERS number indicates a more energy efficient home.
RESNET says that the U.S. Department of Energy has determined that a typical resale home scores 130 on the HERS Index, while a standard new home receives a rating of 100. A home with a HERS Index Score of 70 is 30% more energy efficient than a standard new home and a home with a HERS Index Score of 130 is 30% less energy efficient than a standard new home.
While many features in new homes that increase energy efficiency are invisible to buyers, custom features such as solar panels, tankless water heaters, and geothermal heating systems can often be added to further reduce energy consumption.
“The utility bills on our old house, which was built in the 1950s, were about $300 or $400 per month,” Mendoza says. “Now our bills are about $60 per month, which is an amazing savings. Not only is the house built with much better energy efficiency, in general, but we opted for solar panels, too.”
Additional Perk: Safer Neighborhoods
Location is a major factor home shoppers consider when they choose to buy new. New homes and new home communities get built close to urban hubs and local amenities, providing families with both a comfortable new home and a vibrant community. Living in a safe neighborhood is at the forefront of home shoppers’ minds and investing in a new home allows them to feel safe in the home and neighborhood they live in.
For home shoppers with children, getting zoned to the best school districts in the area plays a role in choosing to buy new homes. Children who live in new homes can attend good schools and tend to have higher achievement levels in math and English.
For more information on the entire homebuying process, check out our New Home 101 Guidebook, or visit the Learn Center for quick tips and advice.
Michele Lerner is an award-winning freelance writer, editor and author who has been writing about real estate, personal finance and business topics for more than two decades.
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Patsy
We are moving to Paris, TN in the spring of 2021, there are some residential areas being built. Question we have our own plans and will use them, will the contractor allow us to be able to use them?
Jamie Garcia
Hi Patsy,
Once you select a builder, you can discuss your custom floor plans with them.