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Pros And Cons Of Buying Used Homes
When it comes to vehicles, we can often find drivers who feel that people who purchase new cars are getting ripped off.
It’s not hard to understand why when a supposedly new vehicle can have it’s value slashed by as much as 20% just 1 month out of the warehouse garage.
But this economics of depreciating value don’t hold true for real estate.
So please… if you have the tendency to ONLY buy used cars, don’t apply this logic with houses as well.
In fact, property value tends to go up more often than not as it ages through the years.
Yet there is a huge market for used homes, or what we also call completed property or completed property, even when they are decades old.
This is because of the following advantages of used houses that make them so desirable.
1) Less expensive
While it was previously mentioned that houses tend to rise in value over it’s lifetime, they are still generally less expensive than new homes.
This is because newer houses tend to be built with latest material, technology, and come with a lot of fancy gimmicks. Making them expensive while delivering good value.
This does not mean that resale properties are cheap. It’s just that generally they are priced cheaper tan newer ones.
One of the main reasons for this market behavior is that there are always more completed houses on the market than new houses.
This higher supply will inevitably have a depressing impact on price.
2) More negotiable terms
When you are dealing with homes sellers, you are most likely dealing with an individual or two.
This makes negotiation easier as you can offer to give and take on certain sales terms.
But when you are buying a new house from a developer at a sales launch, there is often little room to wriggle… let alone negotiate.
Dealing with an individual also mean that you can build rapport and have a sense of what are the key motivations to sell. Helping you identify weak spots which you can target in negotiation.
And if the listing has been around for months, there is every likelihood that a seller would cave in and decrease his asking price considerably.
3) Mature estates
Older homes tend to be located in mature estates with a lot of amenities.
Just walk down the city and look around at the residential buildings that surround the streets. If any of the apartment units are available on the market, they are all used homes… in a great location.
How many plots of undeveloped land do you see? Are any of them meant for residences?
This is one of the critical factors that make resale houses so attractive to buyers.
Seldom do we see new homes scheduled to be built around established and mature areas.
And if you are lucky enough to discover them, be prepare to pay through your nose just to grab a small unit.
4) Proven condition
The last thing you want to find out after moving in a new house is that there is something wrong with the foundation.
Granted. A developer might fix it for free while under warranty. But that can cause a lot of inconvenience to your lifestyle. And who’s to say the structural problem would not come back to haunt you in future?
A used home that has been built a decade ago has proven that it can last the distance. There will also be no issues with settling.
Even if there were problems with it, the owner who is selling must have fixed any grave issues during the decade of inhabiting the house.
Saying that, do get a proper home inspection conducted by a licensed inspector when buying older homes.
5) Authentic flavor
This is more of a personal preference.
If you like the rustic nature of older homes, the only choice you have is to go with used homes.
While completed resale houses have their pros, there are certain disadvantages to them as well that turns people off.
Here are some of them.
1) More costly to maintain
You might be able to grab a used house at a bargain price. But the costs of maintenance and repairs would more likely to outstrip that of a new house over the long run.
An older house is probably not built with energy-efficient systems. And there is every chance that the seller did not get modern technology installed as well.
For example, new homes are often fitted with solar panels and cutting-edge insulated walls. These can be a great cost savings factor that older homes can never compete with.
You are going to have to get certain stuff like shingles, heating systems, or decks, fixed soon too.
2) Layout does not fit modern living
Homes that have been built decades ago can really look pre-historic.
This don’t just apply to the visual impact. The functional impact can be lacking too.
For example, some houses might lack a garage or a master bedroom. Some might have basements that serve the sole purpose of elevating the house above the ground and nothing else. Some might not even have proper piping to deliver water into the house and it’s only access to water to via a well.
If you are considering buying a used house, do keep functional issues in mind.
3) Safety and health hazards
Do you know that certain houses have hazards identified by the authorities… but are not required to get them fixed?
An example is lead paint.
Lead paint can cause serious harm, especially to children.
Older homes are often painted with lead paint. Yet homeowners are not required by law to have these hazardous material replaced.
However, they are required to declare them. Is that enough?
You can never be sure whether an old house is up to speed with the current building code.
You would be taking over someone else’s problem if you do not check what exactly you are buying.
Finally, completed houses are a better choice if you are looking to invest in rental property.
You can literally start renting it out next week and collect a rental monthly. Even better if there are inherited tenants that are already renting the place.