Benefits of Buying New Construction
The term “new construction” refers to a brand new home that is built from the ground up. Most homes for sale in Philadelphia are “resale,” which means that the home has already been lived in and is being offered for resale to a new homeowner. In fact, many row homes in Philadelphia are 100+ years old! Some homes listed for sale may be referred to as a “reno,” which means the home was recently renovated. The scale and amount or renovation can vary from structural items such as upgrading building systems like electrical or adding central air, or some homes may be completely rebuilt from the bones.
When shopping for a home, it’s important to understand the differences between a new construction, resale, and a renovated home. Here are some of the physical characteristics of each:
New Construction:
Built from the ground up using modern building codes and technology
All brand new systems and appliances
Usually designed with finishes that are on-trend
Usually come with a home warranty
Resale:
May have old systems that can impact safety and/or energy efficiency
May have old systems that are towards the end of their useful life (this means buyers will need to plan for replacement)
May have hidden problems
Sometimes have character or unique historical features
Design may not be on-trend
Condition of the property is highly dependent on how well previous owners took care of the home
Renovated:
Can have a blend of new systems and historic charm
Quality of renovation workmanship can vary wildly
Can have a blend of items from the new construction and resale homes characteristics
New construction homes have additional unique benefits that are different from physical characteristics.
Additional benefits of buying a new construction home:
No bidding wars — Reserving a unit pre-construction locks in pricing and protects buyers from getting into bidding wars.
Customization options — Reserving a unit pre-construction allows buyers the opportunity to select custom finishes.
Time to save — Reserving a unit pre-construction often gives you months between when you reserve the home and the closing date. This gives buyers time to save money for closing costs and/or work on improving credit issues prior to complete a full mortgage application.
Builder Warranty — Typically when you purchase a home, you would have the home inspected buy a certified home inspector. Sometimes issues will come up during the home inspection — costly repairs, old systems that will need replacing, etc. When you buy new construction, not only is everything new, but the home comes with a Builder Warranty.
10-Year Tax Abatement — In the City of Philadelphia, some new construction homes qualify for a 10-Year Tax Abatement which reduces your monthly real estate taxes cost. Often this means a savings of thousands of dollars a year.