Wednesday, December 2, 2015

Why Do Custom Homes Cost More Then Resale Homes?


Why do Custom Homes Cost More Then Resale Homes?


The simple answer to that question is that Custom Homes are brand new and come with a warranty, where a home that you bought from someone else is older, has been used and generally will be in need of some kind of repair.

Resale homes if they are older then 15 years or if they have not been updated in the last 15 years will need to be renovated. They will need to be renovated either immediately (before you move in) or with in the first couple of years that you live there.
When buying someone else's home you are buying it at discount compared to a new one because the life expectancy of everything in the home is less then the new home.

Key staples to the home have already started the clock towards being fixed ore replaced all together;

  • Furnace. Either because of improper maintenance, age or the need for something more efficient you will eventually have to replace parts or the entire heating system.
  • Septic System. If you live in the country or somewhere with no access to sewers then you will be on a septic system. Septic systems have a shelf life, usually after 30 to 40 years they need to be updated, repaired or replaced. This depends on the overall use, the way it was used and how it was maintained. Replacing septic systems can be expensive.
  • Windows. This is one of the biggest expenses that you will end up with in a used home. Windows usually have to be replaced after 20 years, depending on what type of windows and the level of trim this can become very expensive.
  • Roofing material. Most used homes have asphalt shingles, asphalt shingles are only good for about 15 years and then they require replacing. This is usually not that big of a cost, but if you end up with a leak because of the condition of your shingles then the costs start to rise.
  • Waterproofing/foundation. This is one of the trickiest things about used homes, if they are in a wet area then the tar that was applied to the outside of the basement walls to keep the basement dry will actually dry out after 20 to 25 years. This can not only be an expensive to fix it also can be hard on your landscaping around the home.
  • Style. Homes are out of date after 10 years these days. For resale you will have to update the kitchens and bathrooms when you go to sell it.
  • Toilets and Faucets.Things start to wear out after 15 years like toilets and faucets, so there's a very good chance that you will have to renovate your bathrooms and kitchen while you are living in your home.
  • Abuse. Used homes can go through a lot of abuse from previous owners, abuse that you do not notice while touring it. It's only later that you come to understand how heavily used the home was by the previous owners.
Today one of the number one reasons people have new homes built or they renovate an older home is to increase the energy efficiency of the home. Custom homes built today are so well built and sealed tight that it's almost impossible to compare them to homes that are 20 plus years or older. With energy prices for gas and electricity only going up having a home that is energy efficient is becoming an ever more demanded and required commodity. 

So when you are comparing why a new custom home is more expensive then homes that are resales think about everything that could and will eventually go wrong with the used home. Add that into the cost of the home and then see how much of a price difference there are between the two.

Rob Abbott
Village Builder Inc.

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