Advantages of buying New Home vs. Foreclosure

A common knowledge among home buyers is the idea that the best home values in today's market are foreclosures because most of the time they can buy it below the current market value. While there are really some good deals on homes in foreclosure, for most buyers, buying a new home is actually the better value.

For starters, when you purchase a new home you are protected by a warranty. If anything goes wrong, the home is covered by the builder's limited warranty on workmanship and materials, as well as structural warranty. You have peace of mind knowing there won't be any unanticipated out-of-pocket repair costs to absorb.

Another benefit of buying a new home is the special incentive programs many developers currently offer to assist buyers. Some of these incentives, such as easy payment scheme can save you lots of money.

Of course, the ultimate benefit of buying new is having the opportunity to purchase your dream home. You are the first owner and everything is pristine, sparkling, and brand new. You have the advantage of living in a home and a neighborhood that truly reflects your taste, lifestyle and personality.

As for the foreclosed properties, most buyers don't realize there are a variety of risks associated with buying a foreclosure. Perhaps the biggest concern for any potential buyer should be the fact that properties in foreclosure are sold "as is." This means there's no warranty protection. When you purchase a foreclosure you have no recourse against the seller if there are construction defects, environmental hazards, or problems of any kind with the home.

Additionally, when you purchase a foreclosure you can't always be sure of the condition of the home. Many homeowners stop taking care of the property when they realize they will be losing the home. Often, maintenance issues are not immediately visible, for example, having the water turned off for a long period of time can result in problems with seals and plumbing fixtures throughout the home. Buyers are forced to come out of pocket to bring the home up to an acceptable standard of living.

Keep in mind that many foreclosure properties may also require a substantial additional investment after the sale to replace damaged fixtures, missing appliances, stained or worn-out carpets and dead landscaping.

Finally, for many, there's still a stigma attached to buying a foreclosure-a feeling of buying someone else's problems or benefiting from another family's misfortune. Those who practice Feng Shui may fear the negative energy in the house could impact their family and cause bad luck.