Home Buying Costs: New Construction vs Remodel

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Home Buying Costs New Construction vs Remodel
Slope Style Realty Christy Wilkey Caroline
Krumel
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You will pay more money on a price/square foot
basis for a new home versus a resale home in Park
City. Yet, some people still choose to build.
Below are some pros and cons to new construction
vs remodeling an existing home. We also look into
the costs of buying an older home and remodeling
it.
Disadvantages of New Construction
Aside from the cost of the land, new homes simply
cost more. Why is that?
1. Labor Demand is high which means so are
costs.
2. New build costs Building codes are more
stringent, building permits are more expensive,
and the cost of utility hook ups has increased.
3. Higher quality construction Newer homes are
generally better built.
4. Energy efficiency The trend for energy
efficiency and energy certifications can cover
windows, insulation, roof and appliances,
increasing their cost.
5. Materials Older homes were built with
materials that were purchased a long time ago.
New homes require new materials.
6. Financing Interest rates for construction
loans can be higher than financing for homes
already built.
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There may also be additional monetary and
opportunity costs that may not be in your
original calculations.
1. Construction delays Bad weather, delayed
inspections, or busy contractors can cause delays.
2. Excavation costs If during excavation you
learn that you need to jackhammer or blast solid
rock, your costs will go up.
3. Window coverings Window coverings are
usually included on resale homes.
4. Landscaping The cost of landscaping, which
includes hardscaping such as cement patios and
stones as well as grass, trees and flowers, needs
to be factored in.
5. Furniture Most people dont like to move old
furniture into a new home.
6. Upgraded finishes Upgrades including paint,
plumbing, flooring, and light fixtures can add up.
7. Fences Some neighborhoods allow fencing and
others do not. Most allow electric or invisible
fences. If you have dogs, this can be a
non-negotiable add on.
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Lets also talk about the cost of land. When you
buy an existing home, the cost of the land is
included. If you are looking to build a home in
an established area, the scarcity of land may
make it very expensive. In some neighborhoods,
there is no more vacant land and buyers need to
find existing homes to tear down and rebuild.
Finally, lets not forget that you need to spend
money on another place to live while you are
building your new home.
Advantages of New Construction
1. One advantage of a new construction is that
you construct what you want as opposed to
demolishing an older home and retrofitting your
dream home into a very specific space. Lower
maintenance All the appliances, furnaces, water
heaters, roof and building systems are new and
under warranty. Some of these warranties are for
one year and some are for 10 or more. In Utah,
the builder is required to provide a one-year
warranty for construction.
2. Lower utility bills New construction is
better insulated and has more energy efficient
systems.
3. You get exactly what you want Your new home
will be the size and floor plan you desire. You
may get to choose everything from the
counter-tops, floor coverings and appliances.
Sometimes it is difficult to find the right house
on the right lot with the right views. By
choosing both the lot and the house plan, you get
what you want.
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Disadvantages of Remodeling an Older Home or Condo
1. You are taking on the older roof, appliances,
plumbing and heating systems.
2. You are committed to the original footprint of
the home, even if you change the floor plan.
3. Living in the home during a remodel can be
stressful. You may have to wash dishes in the
bathroom sink, eat meals out, and live with a lot
of dust and people coming in and out of your home.
4. If you dont live in the home during the
remodel, you have to pay to live somewhere else.
5. Sometimes hidden defects are found that must
be fixed or the job goes over budget for other
reasons.
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Advantages of Remodeling an Older Home or Condo
One advantage of buying an older home and
remodeling is that you can get a great lot
location.
1. Some of the homes that are the oldest and in
the worst condition are built on the best lots.
Buying an older home that needs some love is a
great way to get an irreplaceable homesite.
2. The numbers usually dont work if the home has
already been remodeled, even if the previous
owners did a cheap or poor remodeling job.
However, if you can find the worst home in the
best location, a home in close to original
condition, a distressed or motivated seller, or
if you are planning to live in the home for many
years, the numbers can work out better than
buying a new home or one that was remodeled by
someone else.
3. You can get exactly or almost exactly what you
want by making small changes to the floor plan
and picking out cabinets, colors, fixtures,
appliances and finishes that you like.
4. In an established neighborhood, all the homes
are built and you can be confident that your view
will not be obstructed or change.
5. If you love the location and neighborhood of
your current home, why move? I fall into this
category and have become a serial remodeler.
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http//www.slopestylerealty.com
435-565-1492