Should you buy an old or new home?

With the economical crisis raging hard homebuyers tend to buy more existing and cheaper houses.
But is that really the way to go? Or is it better to buy a new house?

A study from the US Commerce Department shows that homebuyers bought 374,000 brand new houses versus the resale of 5.1 million existing homes. So new homes make up for about 7% of the total home sales.

The reason why homebuyers tend to buy already existing homes is because they are cheaper than brand new houses. This is a really important point during the economical crisis.
But homebuyers focus too much on the price and location and don't really care about the home's condition. Which is also an important factor.

An already existing house is a lot cheaper, but it can be made of old and bad materials. The key question for buyers is if the materials were replaced or upgraded lately. If they are more than a decade old, buyers should take into account the replacement costs.

If you buy an existing home, you should take into consideration that this already has a certain style. You may not like certain parts of the house, like the kitchen is outdated or the living oom needs an update,... . Replacing or updating those parts will cost you a lot of money.

Looking at the numbers I think a lot of people are fooled by the price difference between an existing and a new house. But this is because of the economical crisis. People are really stuggling to survive and they'll be happy if they can save money. But most of the time it's a trap. The homebuyers are so focused on price and location that they forget to take into consideration the condition and age of the house, that mistake will cost them a lot of money.

So don't be fooled by the cheaper price of an already existing home. In the end it will cost you more, thanks to a lot of repairs and replacement costs, than a brand new home.

Written by Dieter De Smet

Source: http://www.bankrate.com/finance/real-estate/should-you-buy-an-old-or-new-home-1.aspx (March 31, 2010)