New Construction Versus Resale

 

01 / NEW CONSTRUCTION New Home Confidence ✓ Brand-new major systems ✓ Builder warranties may apply ✓ Choose finishes and upgrades ✓ Modern layouts and features ✓ Consider taxes, HOA and assessments

02 / RESALE HOME Established Living ✓ Established neighborhoods ✓ Mature landscaping and lifestyle ✓ Specific school and commute areas ✓ Potentially lower property taxes ✓ Future repairs may be required

A resale home gives you the ability to choose a very specific neighborhood, school area, commute, and established lifestyle. In many older Southern California neighborhoods, you can decide whether you want a homeowners association, mature landscaping, a finished backyard, and a community that has already grown into itself. An older home may also have lower property taxes than a brand-new home in the same general area.

The tradeoff is that resale inventory can be limited, and the best homes may attract competition. You also need to think ahead about the age of the roof, air conditioning, windows, appliances, and other systems. Those improvements may not be urgent today, but eventually they become part of the cost of ownership.

New construction offers a different kind of confidence. The roof, air conditioning, windows, appliances, plumbing, and electrical systems are new. Many homes come with builder warranties, and you can often choose finishes and upgrades that reflect your own taste rather than inheriting someone else's.

The backyard may need time and money, although builders often complete the front landscaping and may give you six months to two years to finish the rear yard.

There are costs to consider. New communities often have higher property taxes, homeowners association fees, and sometimes special assessments such as Mello-Roos. But it is important to compare those costs with the capital improvements an older home may require. A higher tax bill can still be easier to live with than a surprise roof, air conditioning replacement, or major window project.

Of course, if taxes and fees push the monthly payment beyond what a lender will approve, a resale home may be the wiser choice.

Right now, many builders are offering meaningful incentives to attract buyers, including interest-rate buydowns, closing-cost assistance, and design-center credits. In some cases, those benefits can total tens of thousands of dollars.

That can make a new home more affordable than it first appears, but compare the complete picture: purchase price, taxes, HOA, special assessments, upgrades, and the long-term payment.

A knowledgeable real estate agent can make a major difference. Often, the builder pays the agent’s commission, and a good agent may know about homes falling out of escrow, special incentives, or opportunities a builder needs to close before the end of a reporting period.

Bring your agent with you from your first visit and make sure you still have independent representation, inspections, and advice.

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