Will a Brand New Home cost me more than a resale?

In looking  at how much a new home will cost, it is important to look at more than just the purchase price of the home. There are many other factors that may contribute to your cost, in purchasing a new home.

For example, a new home builder may provide a warranty on your new home. Many builders include a 10 year structural warranty that includes a 2 year warranty on plumbing, heating and electrical problems that may arise. Sometimes this warranty is transferable, if you sell your home within the 10 years. Manufacturer warranties are also proovided on the new flooring, appliances, windows, roof etc. These warranties can be an added value when selling your home.

Many builders are “Energy Star Qualified,” homes. These homes are at least 15% more efficient than homes built to 2004 International Residential Code (IRC). Some of the additional energy efficient features of these new homes, make them 20%-30% more efficient than homes built without these features.

These energy efficient features include such things as “green building,” effective insulation and high performance windows. The heating and cooling system, lighting system, as well as all appliances in the home must meet strict guidelines of the Energy Star program. To find ENERGY STAR builders, go to http://www.energystar.gov/index.cfm?fuseaction=new_homes_partners.locator

Another factor to consider when looking at cost, is your out of pocket expense.Many builders will contribute towards your closing cost. Some will pay up to 6%. For example, on a $250,000 home you may save  $15,000. In some cases, you will only need a down payment on the new home.

You will want to consider all of the possible costs when looking at different homes. As you see, there are more costs, than just the asking price of a new home.

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