The economic downturn has hurt many American families during the past few years, and sadly that means there are a larger number of foreclosed homes on the market than during a healthy economy. The lower price of these homes can make them look like a bargain, but home buyers need to carefully compare the actual cost—and advantages—of a newly constructed home versus a foreclosed one before you buy.

During an educational seminar at the 2012 International Builders’ Show in Orlando, Jay McKenzie, vice president of Builder Digital Experience, LLC, offered a number of advantages of purchasing a brand new home, and hidden costs of foreclosed homes that buyers need to consider:

Many foreclosures are sold “as is” with no disclosure requirements. You could be surprised with major repair bills for issues such as foundation faults or other structural defects, mold, hidden water damage, unsafe wiring, rodent infestations and more. A foreclosed home that appears to have been renovated may not have been done so with the proper permits and inspections. A brand new home provides peace of mind for your family’s safety because it has passed inspections and conforms to current building codes. A new home is also under warranty and any issues that arise during the warranty term will be fixed at no cost to the home owner.

Note:  Homes built before 1978 are likely to contain lead paint and when children breathe or ingest lead dust they can become poisoned and get very sick. Eight ZIP codes within Erie County, NY have been designated by the NY State Department of Health as “Communities of Concern” meaning children are at high risk for lead poisoning. Many of these homes also contain asbestos and lead piping.

The United States Fire Administration and National Fire Protection Association report that Forty percent of all home fire deaths resulted from fires in homes with no smoke alarms, while 23% resulted from homes in which smoke alarms were present but did not operate. The death rate per 100 reported fires was twice as high in homes without a working smoke alarm as it was in home fires with this protection. Forbes Capretto homes contain hardwired smoke detectors to reduce the risk of such fatalities.

New homes can be personalized with appliances, cabinets, countertops, carpets, floor coverings, paint color and other design elements to meet your family’s needs and tastes. They also come designed for modern lifestyles, with open space floor plans, walk-in closets, creative storage solutions and conveniently-located laundry facilities. With a foreclosure, you’ll have to spend time and money to knock out walls, re-paint, and make other renovations to change the previous owner’s tastes to your own.

Newly built homes are highly energy-efficient, saving the buyer money and helping the environment. New windows, doors and insulation better control the home’s interior climate, and Energy Star-rated appliances and other modern components will help save costs on utility bills. With a foreclosure, if the appliances, water heater or HVAC are in working order, depending on their age, they may not be for long. And they certainly aren’t as energy-efficient as new ones.

According to the 2009 American Housing Survey, 26 percent of all home owners spent $100 or more a month for routine maintenance expenses, while only 11 percent of owners of newly constructed homes (less than four years old) spent this amount.

New homes come outfitted with the latest home automation and wiring components that provide state-of-the-art technology capabilities to accommodate modern home appliances and entertainment resources such as high-definition televisions, full-house sound systems, hard-wired fire and security alarms and more. Foreclosures probably don’t have updated wiring, and old wiring not only may not be able to handle modern resources—it may be unsafe and a fire hazard, and will cost a lot to update to current standards.

Financing a new home is easier than financing a foreclosed home. At Forbes Capretto, we can complete the closing quickly, unlike banks that may have a backlog of homes to process, which can take months or years.

Finally, the American Housing Survey found that more than 90 percent of owners of newly constructed homes ranked their neighborhoods as either a 9 or a 10, while only 65 percent of all home owners gave the same scores.

For More Information

If you would like to find out more about the benefits of New Home Ownership, please call one of our New Home Consultants at 716.651.HOME or contact us online.

We will be holding our next Home Building Seminar in the summer.  This is offered free of charge and provides attendees with insight into how the building process works and how to choose a new home builder.  Reserve your seat today!