Comparing New Homes to Foreclosures
The economic downturn has hurt many American families over the past few years, and sadly that means there is a larger number of fore-closed homes on the market than when the economy is healthy. The lower price of these homes can make them look like a bargain, but home buyers need to carefully compare the actual cost — and advantages — of a newly constructed home versus a foreclosed one before you buy.
Many foreclosures are sold “as is” with no disclosure requirements. You could be surprised with major repair bills for issues such as foundation faults or other structural defects, mold, hidden water damage, unsafe wiring, rodent infestations and more. A foreclosed home that appears to have been renovated may not have been done so with the proper permits and inspections. A brand new home provides peace of mind for your family’s safety because it has passed inspections and conforms to current building codes. A new home also is under warranty, and any issues that arise during the warranty term will be fixed at no cost to the homeowner.
New homes can be personalized with appliances, cabinets, countertops, carpets, floor coverings, paint color and other design elements to meet your family’s needs and tastes. They also come designed for modern lifestyles, with open-space floor plans, walk-in closets, creative storage solutions and conveniently located laundry facilities.
Newly built homes are highly energy-efficient, saving the buyer money and helping the environment. New windows, doors and insulation better control the home’s interior climate, and Energy Star-rated appliances and other modern components will help save costs on utility bills.
New homes come outfitted with the latest automation and wiring components that provide state-of-the-art technology capabilities to accommodate modern appliances and entertainment resources, such as high-definition televisions, full-house sound systems, hard-wired fire and security alarms and more.
Financing a new home is easier than financing a foreclosed home. Many builders offer incentives to reduce closing costs and can complete the closing quickly.
It is important to note that some home builders have expanded their businesses to include buying foreclosures, then renovating and reselling them. In these cases, the builder normally has inspected the home for hidden damage or dangerous conditions, gotten the required permits and completed the necessary repairs. They also often renovate, replace appliances and components and perform many cosmetic upgrades to make the home an attractive and safe place for the buyer.
For more information on what to consider when buying a new home, contact Building Industry Association of Hawaii at biahawaii.org.
Karen Nakamura is executive vice president/CEO of the Building Industry Association of Hawaii.