Buying a brand new home has a strong appeal — everything is crisp and new and under warranty. But what about the timing of that new purchase? Is it wise to be among the first homeowners in a new subdivision or should you hold back and wait to buy one of the last houses available in a neighborhood? What are the pros and cons of buying early and late?
Early Adopter in Subdivision
You are in the market for a home and you’ve seen advertising for a new subdivision in an area you like. The model homes were just recently completed so you go out for a look. The sales rep answers your questions, showing you the available floor plans and the upgrade options. You walk out with a thick folder of information. After a bit more shopping around, you decide on this one. You will be one of the first buyers.
In the early stages of a neighborhood’s construction, lot prices are often discounted to jump start sales. Frequently the builders will offer special pricing, or they will offer credits toward upgrades for signing early in the life of the subdivision. It’s common for them to set end dates for the special pricing, after which the cost goes up significantly. Being a pioneer in the neighborhood also means choosing from among the best lots. Later, as the neighborhood begins to fill up, the choice lots will be gone.
Finally, because builders steadily increases prices on the homes throughout the selling period, your home’s value will likely appreciate. In a few years, you would likely sell for a profit.
Here’s a bonus: Oftentimes homeowners will form strong bonds and friendships with neighbors because they have all bought and moved in around the same time. Developers will often encourage the camaraderie by arranging neighborhood parties and gatherings.
Of course, there are also a few negatives. Design flaws in floor plans often don’t get noticed until later stages in the development of a subdivision. Until the subdivision is completed, early buyers must contend with the hassle of construction traffic. Finally, you might have delays in getting warranty work done because those same companies are working on new homes.
Late Bloomer in Subdivision
When buying one of the last homes in a newly built neighborhood, your lot choices will be slim and those lots that are available may have major problems that turned off earlier buyers. On the plus side, since construction is winding down, you won’t have to endure the traffic and the early morning noise of work crews.
Pricing, however, is a toss up. While prices have likely climbed as the neighborhood has grown, developers will often offer discounts at the very end when the sales office is being shut down. The discounted prices, however, likely won’t be as low as they were in the subdivision’s early days.