The Benefits (and Drawbacks) of Buying a New Construction Home in Colorado Springs
Posted by Lauren Schneider on Tuesday, May 7th, 2019 at 1:18pm.
It’s not difficult to understand why Colorado Springs has the appeal it does for new homebuyers. It offers all the amenities and conveniences of bigger urban areas in the state but with a more affordable cost of living and opportunities to enjoy the great outdoors. There are many others reasons why we meet so many people looking to buy a home in Colorado Springs and the folks who move here tend to rave about what it’s like to live here. It's no surprise Colorado Springs is known as one of the fastest growing areas in the entire country.
There are many people who enjoy views of Pikes Peak and the entire Front Range every day of the year, and with its clean, crisp fresh air, this area can’t be beat. Colorado Springs residents are certainly lucky to have the array of choices they do when it comes to outdoor sports and recreation. Some of the best times are had when you simply head out for a walk or hike and see where the wind blows you.
For informational purposes only. Always consult with a licensed real estate professional before proceeding with any real estate transaction.
Pros and Cons of Buying a New Construction Home
It’s a big plus for prospective homebuyers that there are a variety of different purchase options available to them in Colorado Springs. For many of them, an existing home that has been well-maintained by the seller is often the best choice for affordability.
On the other end of the spectrum you have new construction homes, and not surprising there are a good number of new detached home developments in Colorado Springs. Now, of course, a newly built home is going to be more expensive but with that comes a host of benefits for homeowners who purchase them. Let’s have a look at the many benefits, and drawbacks, of buying new construction homes in Colorado Springs.
The Benefits of New Construction Homes
1. New Home Warranty
A new home will often come with a new home warranty that is provided by the developer and will provide a welcomed peace of mind for you, knowing that the most integral components of the home are guaranteed quality-built, and, if they’re not, having them brought up to code will not require any additional expense on your part.
The 2-10 Home Builder’s Warranty (HBW) is a smart, insurance-backed, structural warranty that comes highly recommended and is one of the more common in Colorado. It covers qualified structural defect repair costs for 10 years. 2-10 HBW has paid over $12 million in claims on behalf of Colorado home builders.
2. Choosing the Lot
Homebuyers who are early birds and get in on pre-sales for these new developments can often choose the lot that they think will be the ideal location for their home. Each buyer typically has their own set of priorities when it comes to choosing their lot. Some look for natural shade or bedrooms facing a particular way, whereas others want to be at the end of the cul-de-sac, so their children can safely play outside.
3. Ability to Customize
It’s your new home and you’ve got all the freedom in the world to design it as you wish. Many home builders allow buyers to participate in the process of designing the property, and the prospect of having a living space specifically tailored to the consumer's tastes really excites many people.
You might opt for a finished rec room downstairs, choose your favorite type of flooring, or pick the color of the exterior paint
4. Superior Building Envelopes
Building codes these days come with increasingly higher energy efficiency standards that have since been mandated. From an efficiency standpoint, compared to older homes, new builds have to meet these new standards, making them more energy efficient. This is even more important for homes in Colorado Springs where winters can be especially cold.
We can assume that spending less on your home's heating and cooling is going to sound plenty good to anyone considering buying a home here.
5. Green Appliances
People in Colorado Springs take pride in being ecologically minded, and homes that feature energy-efficient mechanics that help to reduce utility bills give them the assurance that they’re doing their part to leave less of a footprint. Newly-constructed homes often include green systems and appliances like high-efficiency stoves, refrigerators, water heaters, furnaces, washing machines, air conditioning units or automated climate control systems that weren’t necessarily available when older homes were originally built. Owners of existing homes do have the option of retrofitting or buy higher-efficiency appliances, but doing so can require a potentially significant expense.
The Drawbacks of New Construction Homes
1. Premium Pricing
Purchasing a new construction home can come at a premium cost, especially if the new home is in an ideal location and the developer is certain it will be in high demand. Mark-ups to generate better margins is standard procedure when it comes to new developments. Just because you're paying a premium for a new build doesn't mean you're being taken for a ride, work closely with your Realtor to make educated assessments about the long-term value of the home and what you should be willing to pay for it.
2. Longer Timelines
Those purchasing an existing home can take possession quite quickly in most cases. That’s not typically the case with a home that has yet to be built. Moving your family in and getting to know your new neighborhood can seem to be way away on the horizon with a new construction home. With a re-sale home, closing usually can take from 30-45 days after the offer is accepted. Waiting can be difficult for some buyers, especially those who are in any type of temporary arrangement while they wait to make the move. However, most new homebuyers are willing to wait with the promise of having their brand new ‘just as we want it’ home being within reach.
3. Reduced Inventories
Colorado Springs' real estate market is similar to other desirable locations in the country; there is often not enough inventory to meet the demand from homebuyers. There are fewer new construction homes on the market than resale homes, with the ratio varying by location. That builders can only construct so many homes at any one time is a reality that never changes. Deciding to purchase a new construction home will mean less in the way of the total number of homes you have to choose from. This is something to keep in mind as you start house hunting or weighing whether a new or resale home is best for you.
Should I Buy a New or Resale Home?
Homebuyers have endless options for their big purchase. One of the most common questions we get asked by buyers is whether or not they should buy a new home or a resale home. The answer is different for everyone; however, there are several factors you should consider before making your final decision.
Consider the Costs
Finding your dream home in a resale home is a great feeling. However, one must consider any added fees. With older homes, you must consider factors such as replacing old appliances or investing in needed repairs to make the home more livable. Home features such as the roof, water heater, furnace, AC system, windows, and other components may require repair or replacement, which may drive the overall price up significantly.
New homes don’t have this problem. Since they are brand new, all the components are also modern and up to code. This often results in less maintenance and reduced cost for buyers.
What About the Neighborhood?
Resale homes are often located in established neighborhoods that are developed and easy to navigate. In many cases, resale homes are close to amenities that have been around for years, making shopping, dining, and entertainment a little more accessible. New homes are most commonly located in areas that are not yet built up and residents must rely on driving to chain stores or malls for their shopping and entertainment.
Will Ongoing Construction Be a Problem?
Before investing in a new home, buyers should find out how long local construction will go on for while they move in. You may find that once you move in, you are in store for several more years of dusty roads and noisy construction as more homes are being built in the area.
Many new homes also come with numerous amenities that add, even more, value to the property. For instance, fitness club memberships, access to community pools or recreation centers, and other community events are often included in the price of your home, which is a huge bonus for active families or retirees.
Looking For Customization?
If the home you are interested in is not yet built, you will get the first choice for the features and amenities that go inside the house. New homebuyers often get to choose their kitchen cupboards, countertop material, bathroom fixtures, paint color, and other customizable options. This is ideal for homeowners with a specific vision looking to purchase their dream home.
How Buying a New Construction Home Could Save You Money
That new house smell is a draw for many homebuyers looking to purchase a property. New construction homes are popular with buyers for many reasons. For starters, you are living in a home that no one else has lived in. Additionally, there are many financial advantages to buying a new construction home. Some of the most significant financial reasons to buying a new home include:
The Work is Done
Although new construction homes can cost up to 20% more than resale properties, homeowners prefer a new construction because the work is done. If you purchase the home in the preconstruction phase, you are able to customize everything from the counters to the paint, saving you money when you move in because you won’t need to make any changes after the sale.
When trying to decide between a new construction vs. resale purchase, think about the maintenance fees. New homes have brand new plumbing systems, HVAC systems, and roofs, meaning you won’t be spending significant money on maintenance for a while. Not only does this save you money, but it also gives peace of mind knowing your pipes or ductwork is not going to fail anytime soon.
Energy-Efficient Materials Are Used in New Builds
If you’re asking yourself, “why buy new construction homes?” Consider the fact that new homes are built with modern materials that are often more efficient than older building materials. Better efficiency in your home results in a lower monthly energy bill. This is a huge factor for buyers who are looking to save money on their living costs while also reducing their carbon footprint.
Extra Features Often Come Standard
Other features such as programmable thermostats, security systems, and dimmer lights are often things you need to add after the sale in a presale home. But with a new build, these features are often included. Saving you money on installations and saving time and hassle on your end.
New construction homes are also easier to insure. With a new home, you may be able to receive discounts and other ways to save because the home is new, safe, and efficient. Insurance companies are happy to insure new properties because they are all built to adhere to all safety codes and efficiency standards, reducing the chances of an unexpected claim.
Do You Need a Realtor When Buying a New Construction Home?
As more new construction homes are starting to pop up around the countryside, more homebuyers are choosing to buy new properties rather than existing real estate. There are numerous benefits and advantages to new homes, which we won’t get into here.
One of the most common questions that we get asked about new construction homes is “Do I need a realtor when buying a new home? While it certainly is possible to do it without, there are definite benefits to working with a realtor instead:
Builders May Not Represent Your Best Interest
It’s easy to get carried away in a shiny, new presentation center with countertop swatches and floor plans neatly laid out, however, you have to keep in mind that a sales representative at a presentation center is simply trying to sell the properties for the builder. They do not represent your best interests.
Real estate agents, on the other hand, are mandated to work for a fair and reasonable transaction that has the client’s best interests in mind.
Realtors Are Experts in the Industry
The same way a sales associate may not have your best interests in mind, they also may not have sufficient experience in the real estate industry. Working with a realtor is helpful because they can paint a clear picture of the current market while helping homeowners identify value-adding features. Realtors are able to look past the shiny façade and advise their clients with honesty. Perhaps there is a major feature the builder is advertising that has negative effects that are not being disclosed, a real estate agent is savvy enough to identify potential issues and communicate them to the client to ensure a rock solid sale.
Working With a Realtor Helps Take Some of the Pressure Off
New home sales often turn out differently than regular sales because you are the first owner of this home. This can impact your mortgage, closing, and more. With years of training and experience, a realtor can guide you through this process. Realtors are also able to make recommendations for everything from lawyers and mortgage brokers to professional movers and decorators. Instead of relying on DIY tutorials and vague internet message boards, buyers can get all their questions answered by a professional who knows what they are talking about.
You Will Develop a Lasting Relationship
Even if you purchase your home with the intention to stay for a while, there may come a time when you need to move or relocate. Working with a real estate agent on the initial sale will also provide a valuable contact when the time comes to sell. Working with the same agent is a good idea because the agent already knows you, understands how you work and is familiar with the property.
For informational purposes only. Always consult with a licensed real estate professional before proceeding with any real estate transaction.