New Build vs. Resale in Arizona: Where’s the Better Deal?

New Build vs. Resale in Arizona: Where’s the Better Deal?

I hear this from buyers all the time:

“The builder is offering such a good deal.”

Maybe they are.

But when I'm comparing new construction with resale, I don't want to
compare the sticker prices.

I want to compare what each house is actually going to cost you.

WHY NEW BUILDS CAN LOOK SO ATTRACTIVE

Builders may offer incentives toward closing costs, interest rates or
upgrades, particularly when they're trying to move inventory.

A lower promotional rate can make the monthly payment look attractive.

But ask a few more questions.

Do you have to use the builder's preferred lender to get that incentive?

Is the advertised rate temporary or permanent?

What lender fees are involved?

What isn't included in the base price?

And what will you need to spend after closing?

That last one can add up quickly.

THE RESALE HOUSE MAY ALREADY HAVE THE EXPENSIVE STUFF

Let's say you're comparing a $500,000 new build with a $515,000 resale.

At first glance, the new build wins.

But the resale might already have:

Landscaping.
Window coverings.
Ceiling fans and light fixtures.
A finished backyard.
Appliances.
A pool.
Storage.
And upgrades the builder charges extra for.

Suddenly, the $15,000 difference doesn't tell us much.

NOW ADD THE FINANCING

This is where the comparison gets interesting.

A builder may be able to offer financing incentives that a resale
seller can't duplicate.

On the other hand, a resale seller may be willing to negotiate the
purchase price or offer concessions that your lender can potentially
use toward allowable closing or financing costs.

I want the lender to run both scenarios.

What is your cash to close?

What is your monthly payment?

What will you spend after closing?

Now we're comparing deals.

JILL’S INSIDER TIP

Don't fall in love with the word “incentive.”

Ask what you have to spend to get the house to the same place as the
resale you're comparing it with.

Sometimes the builder wins.

Sometimes the resale wins.

I'm looking at the whole deal.

JILL’S FINAL TAKE

There isn't an automatic winner between new construction and resale.

If the new build gives you the better financial package and the house
works for you, great.

If the resale costs a little more upfront but already includes $40,000
worth of things you'd have to add to the new house, we need to count
that too.

Buy the better deal, not the better advertisement.

Thinking about new versus resale in the East Valley or Pinal County?
Send me both houses. We'll compare them side by side.

602-513-6209
JillHamilton.com
Jill Hamilton, REALTOR®
Buy Sell With Jill | West USA Realty

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