Burning Buyer Question: Buy Brand New or Renovate
realtor tip: ask yourself the following questions
I can’t tell you how many times a buyer has asked us which is the better option. Answer: there isn’t a superior option. Determining what is right for a client is not only very personal it is highly situational. While there are opportunities to customize new construction there is serious opportunity to put your stamp on a full renovation. Any way you look at it the desire to personalize a home runs strong & we are happy to work with clients who want to think outside the box. The renovation option is inherently trickier because there are a lot of pieces to put together in order to find the right home based on the buyers unique needs & situation. Before we even start showing or searching we always start with these questions.
how long do I plan on living here?
If the answer to this is under 5 years, you may want to continue to rent unless its more of an investment that you are going to live in & improve yourself. It’s really important to buy right if this is the case. If it is under 10 you may want to consider new construction (because of the tax abatement) or take on a home that only needs minor renovations. If it is over 10 a large scale renovation might be right for you, or you could do small improvements over time as your family grows or your situation changes. I say over 10 years because renovations take longer than you think they will & they can get costly due to unknown variables.
where do I want to live?
Neighborhoods like Center City, Chestnut Hill or the Art Museum are older established neighborhoods with lots of older homes & limited amounts of new construction. Therefore, expect to pay a premium if you want to buy new. If you are okay with heading a little further out or are absolutely fine paying a premium new construction is a great option.
what is my threshold for day to day inconveniences?
Keep in mind, a large scale renovation that involves moving walls & reconfiguring kitchens or baths should involve an architect to identify load bearing walls as well as placement of mechanical systems. Finding contractors, managing construction & picking finishes can be difficult & time consuming, not to mention living in a veritable war zone while work is being performed. Some people don’t mind this & find the process not only a learning experience but enjoyable while others would rather jump off a cliff.
how handy am I?
If you find a home that only needs minor renovations maybe you feel comfortable renting a belt sander to refinish the hardwood floors hiding under old stained carpet, sprucing up walls or cabinets with paint or even doing some tile work. You might even feel comfortable doing basic plumbing or electrical work to switch out & modernize fixtures. All the above are negotiating points for getting a great deal & the sweat equity put in could make it well worth it to go the renovation route.
how much money & time (since time is money) am I willing to devote to this process?
No matter how great of a general contractor you hire there are a lot of decisions that you will have to make along the way. The larger the renovation the more likely you are to go over budget. You will never know until you open the walls what you are going to find that gets added to the “needs to be fixed” list. As for the financial aspect if you are planning on financing a home it must be habitable. There is always the FHA 203K route but there are strict loan limits & a lot of hoops to jump through to get that construction money. Construction loans are not widely available anymore even to industry veterans. If you strike a really great deal you may be able to go the home equity line of credit route but again that depends on many variables.
what is my end goal?
Is it primarily to build equity? Is it to stop renting? Is it to create your perfect home in the perfect neighborhood to raise your family?
Happy house hunting! If you need a great agent who knows their way around renovations as well as new construction, we know a few, you can contact us here!