The John Burns Real Estate Consulting Group recently reported that for 2016, median new home prices were 35% more than the median price for resale homes – much higher than the 10%-20% new home price premium of the 1990s and 2000s. So, how do you answer the question, “Why should I buy a new home, now?” More importantly, how would your sales representatives answer that question? Would each and every one of their answers be consistent, comprehensive, and position your home(s) in the best possible light?
Obviously, buyers purchase homes for varying reasons based on their own self-interests. But in addition to whatever their top motivations for buying a home, one of the tools your sales team needs is a thoughtfully worded handout of some of the most common and compelling reasons for buying one of your new homes. While you will want to tailor the information to your specific business strengths, the following are all items to highlight.
- Interest rate risk of waiting: 30-year fixed rate mortgages are forecast to be a full 1% higher by the end of 2018 compared to the end of 2017 (longforecast.com). A $250,000, 30-year mortgage at a 4% interest rate (APR) is $148.51 less per month than at 5% APR.
- Escalating construction costs: The average new construction home in the first eight months of 2017 sold for $313,250, compared to $302,300 for the first eight months of 2016, a one-year increase of $10,950 (U.S. Census Bureau data and FRED Economic Data, Federal Reserve Bank of St. Louis).
- Stiffer building and energy codes combined with product advancements mean cheaper utility bills and lower homeowner insurance rates, further reducing your total monthly housing costs.
The financial implications are often the first aspect looked at, but there are lots of other reasons to look at new construction rather than an existing home, including:
- Quality of construction. More stringent building codes are just one of the reasons today’s homes typically offer superior quality compared to older homes, making your new home more pleasurable to live in.
- Design flexibility. Some things that just aren’t feasible to change with resale homes, like garage size, ceiling heights, wider doors, or open, entertaining floorplans.
- Product choices, advancements. When building new, there’s a gamut of products to select from in making your home uniquely yours, based on what’s important to you—such as quieter and safer products…high technology…healthy alternatives…new construction is a hands-down winner!
- Avoid maintenance hassles and cost. New homes are typically lower maintenance due to the products used. Composite decking, tilt-in clad windows, and laminate flooring, all give you back a little more time. Then there’s the risk of expensive repairs associated with older homes such as replacing worn-out appliances, roof shingles, carpet, and furnaces.
- Energy efficiency and environmental responsibility. Homes built today are as much as 60% more energy efficient than homes built 20 years ago, contributing to a more comfortable home. Your energy efficient new home can help prevent the release of tons (yes, TONS!) of greenhouse gasses per year, while helping conserve our energy resources. Advanced building products such as engineered wood and recycled product choices such as carpet made from discarded plastic water bottles further help protect our environment.
- Don’t settle for less. Finally, one of the most important reasons for buying new is getting exactly what you want in your new home.
While you’re planning for your new home, take a look at our resources page for information about home building and design. Resources