New VS Old
- teralorraire
- May 4, 2023
- 3 min read
Elaborating on my reel from yesterday :)
Owning a home is a big investment, one that should be planned and thought thoroughly through. But absolutely an investment I encourage people to look into. If it truly is not the right time for you financially or life wise, then it is good you figured that out. But talking with a lender, realtor and financial advisor can help you lay out all your options and figure out what the best move is for you and your future. If now isn't the best time, but you hope to buy in the future then I still suggest reaching out so we can help you get there and reach your goals!
As a realtor, I try my best to make sure my clients are educated. In today's market, I would also explain the difference of buying new vs old. New construction is not going to appreciate as much an older home that you are putting some sweat equity into. I would also let them know the risks of owning a home for less than 5 years.
North Dakota just released a remodel tax exemption for home remodels that can be done on homes 25 years or older. "Value exempted is the difference between the improved value and the value prior to the start of the improvement, including any demolition. We will consider the “before” value prior to any demolition." Remodels can be done on older homes and it can stay at the current assessed value, it also transfers to a new buyer.
We do not know what the next couple years for rates or home prices, but if it's right time for you, then there is not bad time in my opinion. There is always a chance of short-term risks yes, but long-term rewards. Historically real estate has gone up in value over time. Having the right team around you can help set you up for success and educate you on your current market and options.
I've had a couple people ask me the difference between buying new and old. ⬇️
NEW
Pros
- 2-year tax abatement (Horace recently cancelled theirs). - Less chance of things going wrong - there is no person on the other side of the transaction, meaning no risk of them backing out or being difficult.
- Same price as an older existing home currently.
- Option to customize.
- May have more luck finding a lot you like.
- Warranty.
- Insurance may cost less.
Cons
- Equity doesn't build as fast.
- Smaller lots with higher specials.
- Can be cookie cutter.
- Upgrades can be spendy.
- Lawn, deck sometimes not included (depends on builder).
- Fence costs extra.
- Builds can get delayed and pushed back.
- Less room to negotiate.
- No landscaping or mature trees.
- Unlikely to find a lot in N Fargo.
OLDER
Pros
- Room to put sweat equity into the home - equity builds faster.
- ND just released a tax exemption for remodeled homes over 25 years old. - More room to negotiate.
- Bigger lots with lower specials.
- May be able to find houses in desired neighborhoods better than new construction.
- Mature lots with trees and landscaping typically.
- Can find a home with a pre-existing fence.
- Unique and not cookie cutter.
Cons
- Chance of things going wrong and money needing to be put into the home right away.
- Updates and remodeling costs money (ND is offering low interest loans for remodeling currently).
- There is a human with emotions on the other side of the transaction, deals can fall through.
- Sellers could lie on the disclosures of damages.
- Possibility of baseboard heat/wall AC.
- Insurance may cost more.
Overall
Buying a home comes down to if you're ready! If it's right time for you, then there is not bad time in my opinion. There is always a chance of short-term risks yes, but long-term rewards. Historically real estate has gone up in value over time. Having the right team around you can help set you up for success and educate you on your current market and options!
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