By Heather Soldonia
It is rare to see such an example of REALTORS® and home builders working together, but both National Association of REALTORS® (NAR) and the National Association of Home Builders (NAHB) are both rallying for an extension of the first-time home buyers’ tax credit.
Though the tax credit has served to stimulate both the existing home sales market and the new home sales market, one industry is seeing better numbers than the other. In the past five months, new home sales have risen consistently… and most significantly in the West, a 12 percent increase. Existing home sales have shown some revival, but are still down by 12 percent year-over-year.
As REALTORS®, we are able to represent our buyers in the purchase of either a new home or an existing home; however, in general I think we prefer to participate in an existing home transaction.
Having worked for national home builder, Lennar, I am aware of the many differences between the industries and operations, but for buyers the differences are more superficial. For this reason it is helpful to point out to buyers the general pros and cons involved in purchasing an existing home verses a new home:
- New Homes
- Customized options and upgrades.
- More energy-efficient materials (improved insulation, double-pane windows, heating/cooling systems, etc.)
- Construction and appliance warranties from home builder.
- Home Owners Association (HOA) maintains front exterior of home.
- Lots of incentives, discounts, bonuses and promos offered.
- Backyard landscaping not provided.
- Resale is difficult before construction is completed in the entire subdivision because other buyers would prefer their own customization.
- HOA fees in addition to your mortgage.
- Deals from home builder are often offered only through internal financing.
- Existing Homes
- Can make customized upgrades and get higher ROI.
- State rebates and incentives available for home energy retrofits.
- Most likely has mature trees and landscaping on property and is in established neighborhood.
- Can make changes to exterior without HOA approval.
- Can shop and use any mortgage lender.
- Must purchase a home warranty if desired.
- Remodels, repairs, and upgrades require separate financing.
- May not be wired for today’s technology and security.
- Resale value is based on price and care of homes in the neighborhood.
Heather Soldonia is a Broker/REALTOR® in the San Francisco Bay area with Windermere Welcome Home. She can be found at www.heathersoldonia.mywindermere.com.