Neither is better across the board. New construction offers current building standards, a builder warranty and fewer immediate repairs, but often comes with special taxes, association dues and added costs for landscaping and upgrades. Resale homes offer established neighborhoods, mature landscaping and more room to negotiate, with older systems to inspect and maintain.
What are the advantages of new construction?
The main advantages are that everything is new and built to current code.
- Current standards. New homes are built under today’s building and energy codes. Most new homes in California include solar. Ask whether the system is owned or leased.
- Builder warranty. Builders provide warranty coverage for a period after closing. Read what is covered and for how long.
- Choices. Depending on the stage of construction, you may be able to choose flooring, cabinets and other finishes.
- Less near-term maintenance. The roof, plumbing, heating and cooling equipment all start at year one.
What extra costs come with new construction?
The extra costs are usually in the tax bill, the association dues and the items the base price leaves out.
- Special taxes. Many newer communities are in a community facilities district, often called Mello-Roos, which adds a special tax to the property tax bill.
- Association dues. Many new communities have a homeowners association, and some have more than one.
- Upgrades and finishing. Model homes show upgraded finishes. Backyard landscaping, window coverings and some appliances are often not included.
Ask the builder for the estimated tax rate, the special tax amount and the dues in writing, and compare homes by total monthly cost instead of price alone.
What are the advantages of a resale home?
With a resale home, you can see exactly what you are buying and the neighborhood around it.
- Streets, parks and landscaping are already established.
- Lot sizes, floor plans and home ages vary more, so there is more to choose from.
- Landscaping, patios, pools and window coverings are often already in place.
- Price, repairs and closing date are negotiated with an individual seller.
- Some older neighborhoods have lower special taxes or none. Verify on the actual tax bill.
The trade-off is condition. Order a home inspection and review the age of the roof, heating and cooling, water heater and plumbing so you can plan for repairs.
How is buying from a builder different?
You sign the builder’s own contract, not the standard resale forms, and the terms favor the builder more than a typical resale contract does. Points to understand before you sign:
- How deposits are handled and when they become nonrefundable
- What happens if completion is delayed
- Whether incentives depend on using the builder’s affiliated lender. Compare that offer with at least one outside lender.
- Agent registration. The sales office represents the builder, and many builders require your own agent to be registered on your first visit.
For legal questions about a builder contract, ask a real estate attorney.
Should I get a new home inspected?
Yes. New homes are built by many different trades on a schedule, and an independent inspector can catch items before closing. Many buyers also schedule a second inspection before the builder’s initial warranty period ends, so that issues can be submitted while coverage applies.
Where is each type found locally?
Both are available across the region, in different proportions. Much of the recent new home building has been in Menifee, Lake Elsinore and the French Valley and Winchester areas, while Temecula and Murrieta have a large supply of resale homes of various ages alongside smaller new projects. What is actually for sale changes month to month.
Frequently Asked Questions
Can I negotiate with a home builder?
Sometimes. Builders are often more willing to offer incentives, such as closing cost credits or upgrades, than to reduce the base price, and it varies with the builder and the timing. Ask for any offer in writing.
Do I need my own agent to buy a new construction home?
The sales staff in a model home represent the builder. You can have your own agent represent you, but many builders require the agent to be registered on your first visit, so plan ahead.
What is Mello-Roos?
Mello-Roos is the common name for a special tax levied in a community facilities district to pay for infrastructure and services. It appears on the property tax bill. Ask for the amount and the remaining term for any home you are considering.
How long does it take to buy a new construction home?
It depends on the stage of construction. A completed home can close on a schedule similar to a resale, while a home that has not been started takes much longer. Ask the builder for an estimated completion date and how delays are handled.
Comparing New and Resale Homes?
Aimee Ghafouri is a real estate agent based in Temecula who grew up in Murrieta and works with buyers, sellers and investors across the Temecula Valley and southwest Riverside County.
Aimee Ghafouri, 951 Properties, CAL DRE #02193341. This page is general information, not legal, tax or financial advice. Equal Housing Opportunity.
