With Southern Nevada still leading the nation in foreclosures and short-sales, tales of dirt-cheap deals on used homes can sound too good to be true, and often times, they are. Used homes can come with a multitude of hidden costs, and considering the current housing market, buyers can find new homes at similar prices, without the hidden costs and inconveniences of used homes. Some points to consider when deciding whether new or used is right for you:
1. An existing home can be a Money Pit. A few real estate owned properties (REO), short sale homes, and auction block homes might be worth more than their bargain prices. The question is, how much cash do you have reserved beyond the down payment, including closing costs, auctioneers fees and the initial cosmetic refurbishing?
2. Timetable: You buy a brand new home and know when you are taking possession of it with minimum disruption to your work and overall schedule. You don’t spend hours viewing used homes that may be under contract by the time you make an offer on one. No waiting weeks for banks to choose from multiple offers with low odds on your offer being accepted.
3. Health: Are you health conscious? A brand new home is healthier. There are many new green products that don’t emit harmful chemicals and save you money.
4. Financial: Who will pay your thousands of dollars in closing costs? Builders can pay many of these expenses. The auctioneer usually does not pay any of the closing costs. Interest rates are hovering around five percent. The additional money you may pay for a new home when amortized over 30 years is small monthly compared to the hit you can take living in an unpredictable REO with no long-term warranty.
5. A new home is tailored to you. A new home is built with the colors, features and floor plan you have chosen. A used home is like wearing a hand me down suit, except a home is a suit you will wear a good number of years. It is exciting watching your new home being built or completed. A used home in disrepair is like an old car that breaks down periodically. You won’t love it long no matter how cheap the price was.
6. Timing: Currently new home prices are similar to what they were in 2002, and interest rates are the lowest they have been in 50 years. What else can you buy today at prices advertised eight years ago? Buy it new, with good care a home lasts many years.
7. Energy efficiency: Nevada has high cost water and electricity. There are also new changes in home technology not available just two years ago. You will save hundreds of dollars every year by buying a new home designed to conserve energy.
There may never be a better time to buy new!