One common misconception about pre-owned homes and new homes is that the latter are generally more expensive. In fact, there are several costs associated with pre-owned homes that, when factored into the overall cost, make them comparable to or even more expensive than new homes. When comparing the prices of new homes and pre-owned homes, here are a few things to keep in mind.
New Homes and Pre-Owned Homes: A Price Comparison
Market Value
When it comes to the actual market value of the home, new homes and pre-owned homes are influenced by different factors. New homes are influenced only by the costs of construction, labor, land, and profit. In order for new homes to sell, the builder has to price them according to their real market value, because this can easily be determined by adding up the aforementioned costs.
The price of pre-owned homes, on the other hand, is influenced by many intangible factors that may sway them from their real market value. This includes things such as how much the homeowner still owes on the home, what they are looking to get so they can buy another home, and the fact that they may have overpayed for the home to begin with. This means that many of these costs get passed on to the buyer, thus inflating the price of the home above its real market value.
Taxes
Another cost that is more expensive with a pre-owned home than a new home is the cost of property taxes. Taxes are assessed on the value of a property from January of the year before. For example, property taxes paid in 2014 are actually based on the assessed value of the property in 2013.
This means that for a pre-owned home, you would be paying taxes on the full value of the property (land and house) as soon as you owned it. With a new home on the other hand, you would pay taxes, for a time, on the value of the land only, because the house had not yet been built on it. This is advantageous to you and will save you money during the early phase of your homeownership.
Repairs and Upgrades
The costs of repairs and upgrades often come into play after the purchase of a pre-owned home. Repairs and upgrades for old appliances, HVAC systems, energy efficiency upgrades, and more can easily run up the cost of a pre-owned home. New homes, on the other hand, are built with the latest features and technology, making them more efficient, more durable, and less expensive.
About the Lifetime Series Homes by Mueller Homes
The Lifetime Series Homes by Mueller Homes are a series of semi-custom house designs that were created with the intention of providing home buyers with new option when it comes to shopping for a home. The Lifetimes series includes 14 home templates including, 2 story, first floor master, and ranchers that are pre-designed and ready to build. Because they are ready to build, clients save significant time and money that would have gone into designing a custom home, yet with the Lifetime Series by Muller Homes, clients still get the build quality, attention to detail, and communication that comes with working with a custom home builder. We serve the central Maryland area, and also provide assistance with lot acquisition, evaluation, and home buying finance. Keep up with us on our blog as well as on Facebook, Twitter, Google+, Pinterest and YouTube.
Source
http://www.zillow.com/wikipages/Why-Buy-New—Benefits-of-New-Construction/
Tags: house market value, new home price