Newly built homes

[Ana Vhan]

Phoenix, AZ area has many newly built homes available for purchase. Any downside of purchasing newly built homes vs. homes say that are 10 year old so relatively new. 

Thanks, 

Ana

[Dave Kush]

As long as the numbers work, locations are good, I'd rather have newer than older. I can't see any downside, however I'm interested to see if anybody else does. 

[Noah Corwick]

Hi Ana. Here is some devils advocate on buying new homes. 

One of the inherent risks of new builds is locking in an interest rate. A lot of times you get under contract for a spec home and the financing is based on that specific day. But if the build takes +6 months for example and rates change dramatically, then you are stuck with the higher rate. 

You also have to factor in future property taxes. When they calculate the financing for spec homes, a lot of times they can't accurately forecast this portion. The result is after a year when the tax accessor associates the proper property taxes with your property, there is a decent chance you could have payment shock and your monthly bill rises significant (until you pay off the escrow account balance that is also likely causing this). 

Also depending on the builder, some of the builds will do spotty work. So it is really important to try to get everything repaired before COE or the builder will take their sweet time getting to you/find an excuse to get out of it. 

Also make sure you are represented by an agent instead of the new home sales agent represent you. Remember, they always have their company/the sellers best interest at heart.