Is Newer Home Worth Extra Cost

You don't want this house. If you did, it wouldn't matter.

I've been here just over a year. You've asked many questions about houses, moving and still haven't found " the one".

Instead of moving? Make the home you have perfect for you.

For a home that is just 12 years older there isn't going to be much difference.

For a house that's 50 years older or even more then yes, there will be a much bigger difference.

I'd never buy a new house under those conditions. But I guess they want people to buy the houses in existence so they don't sit empty and fall into disrepair.

J., you don't want this house. you've talked yourself out of every house you've discussed for the last year or three, including ones that seemed pretty perfect.
so no. not worth it.
khairete
S.

You still haven't moved?

In Illinois where you get hard, bitter winters?? What's the roof like?? Siding?? H-VAC?? I know we're living on borrowed time with our H-VAC. It was brand new when we purchased our home 17 years ago, and we do regular maintenance on it - but even the H-VAC guys say it won't be long....so that's $6K IF we're lucky...so all those "lovely extras"??? they don't mean squat when the REAL things that will keep my family safe - roof, siding, heating, etc aren't NEW.

A house that is 12 years old is NOT "newer" to me. For me? "newer construction" means the last 5 years.

You home school, so you'll be paying for something you don't use either way. This is the price you pay.

You can offer than $50K less, tell them why you are offering that and see what happens. Never know unless you try.

However, since you've walked away from a home that you had an offer on, I'd make sure you are serious about this one and the move.

There typically aren't houses for anyone that are perfect. You think chicago is expensive but to some people, it's cheap. Everything is relative. What you're frustrated with would be a luxury to some and a shack to others. People tend to set theIr target as kind of the most they can afford but it's usually not quite perfect. And there's no absolute to whether or not a new house is worth it. You have to look at the price difference and sit down and calculate the upkeep on all houses. Then there are the intangibles. A brand new house won't need much for years but then all of a sudden lots needs to be replaced. But there are also personal preferences. Some people on our neighborhood have remodeled everything. Some people nothing. So it depends what your standards are. Net net, too many variables for people to answer for you.

At 12 years old, this is not a new home. There will be things coming up that you have to manage that can be costly.

For instance, heating and air systems are not made to last 12 yrs. We built our house 15 yrs ago. Builders do not put in the top quality that an owner would put in to a home. Out electric bill was running around $700 a month due to the poor quality and undersized units on our house. We replaced the 2 systems outside, the 2 furnaces in the attic and re-ran some duct work to the tune of about $25,000. Sounds crazy but since we did it, we've never had an electric bill over $400 in the Texas heat. We did this about 7 yrs ago and we are already considering the next step when the outside units turn 10. Granted, we do not have to do everything we did last time but we are still looking at another $10,000 minimum for good quality units.

There are other things that end up needing repaired or replaced in a 12yr old home. We believe you do not put a band aid on it and wait.... we replace and upgrade as we go.

We have new water heaters that are more efficient and that was another $4000. Projects that must be done add up fast and you have to be ready for them or you in up in financial ruin and a house not up to par which can't be sold in the condition it is currently in.

We are on a large lot, heavily wooded and back up to woods. SO the "normal" water bill for many people in the area is around $150 a month but in the worst part of the summer, mine is $700 in order to keep the trees alive. Then it is $2000 every summer/fall to make sure the trees are all trimmed properly.

We pay about $15,000 a year with property taxes but we did use the school system because it is consistently rated one of the best in the country. Our daughter is 2nd year in college right now and our taxes don't go down but I do support our school district. We own daughter's condo across town and pay about $5000 a year on taxes with that plus $250 a month HOA which maintains the place extremely well. BOTH places are in perfect locations and will do well if we choose to sell or hold as investment properties.

So over time, you estimate to be spending about $100,000 plus in taxes alone on this house. That is not a tremendous amount but it is up there and that money could well be placed in other financial avenues such as securing your retirement, college educations, wedding fund, first house or down payment of a house for children, etc. You get my gist.

So if you are liquid enough to be prepared to say goodbye to that money and think nothing of it, AND maintain the property as it should be maintained... go for it. If not, and the house where you are meets your needs right now, why spend the extra money.

I believe I recall that you have 3 small children. I don't know the ages but remember that the children will not be in this house long term... off to college, etc which means that the house you are currently in, might suit your family well. For the record, my entire upstairs us empty because that is the area daughter lived in all of her life. I have 3 bedrooms, library, game room and 2 baths upstairs. I am rarely upstairs but my hubby did move his office up there. We don't plan to downsize because we could never get the privacy we have now and it would cost more in the long run for smaller space. The way I see it, this house will be our daughter's someday and her choice to sell or live here. She has expressed living here with her children someday.

It is a personal choice and one that is not right or wrong by any means. I think a major part of the decision is location location location and if you can financially manage it. It is not worth moving, in my opinion, if you are going to be putting yourself in debt.

Best of luck to you!!!

ETA: I had no idea my post posted because when I hit done my computer said this page is no longer available. I thought I typed all that and lost it... Oh well. I don't know about the housing market in your area. You can offer $50,000 less but I don't know of anyone with a home marked up that much.

Around here the market is crazy.... houses are gone within a week and there are bidding wars. We paid over the asking price for daughter's condo in cash that that is the only way we got it... simply because we could close that week. The good part is that if we were to sell today, the prices have already jumped $30,000. They don't go on the market... it is all word of mouth and you have to have the right realtor who is in the know. Houses on my street which back up to the woods like we do rarely go on the market and when they do, they are gone within 2-3 days, again at bidding wars.

Best of luck to you!!

Where we live, it is the property and location that run up taxes. We just sold an old home that was not valued very much, but the little bit of land it sat on was high because of the location. We purchased a brand new home about 20 min from our old home. . We sold our home and received cash.

So purchasing a home in December, with cash, we were able to get a great deal.. The house came with ALL of the brand new appliances. Here is the deal, not only is this location better tax wise, it is so new that we have not had to use the heater or air conditioner. The house is the perfect temp inside! The appliances are all energy efficient. In our old house we knew exactly what the weather was like, because there always seemed to be heat or cold coming into the house.. Our electric bills were through the roof, literally.

You will need to weigh your choices. Ask the right questions about average water usage costs, electricity and gas. How old is the roof, the appliances, etc.. A home that is over 15 years old can make a huge difference from a home built 5 yeas old or less.

It makes better financial sense to keep your current house & fix it up how you want it. Putting the money into that.

Moving/buying another house creates more money expeniture: property
taxes, starting your loan over etc.

I haven't lived in a state where the taxes were different for older homes compared to newer ones. Just where the taxes are lower by county. I currently live in a county with much lower taxes then say Kissimmee and I am only minutes away.

I will tell you that even with a new home there can sill be problems, but they will usually be a home warranty. Owning an older home is nice if you like the charm and if it has been remodeled. Older homes can cost more with repairs. If a building code has changed it could cost you twice as much when you remodel or need to do repairs.

Personally, I would not move to a home where the taxes were so high. What happens when they raise the taxes again? They always go up never down.

Is "new" worth it! YES! Absolutely, to me.

I also live in cook county in Illinois and get taxed like crazy too.

I have lived in new and old and here why I'm a fan of new:

-insulation- warm during the polar vortex and cool in the summer all without exorbitant energy costs
-closet space and lots of it!
-a bathroom attached to every bedroom
-deep basements that function more like a family room
-two ac units, two hot water heaters, and two heaters! All that can be adjusted to save money.
-a layout that functions like today's family lives-kitchen opening to family room and a mud room
-second floor laundry!
-no risk of lead, no old windows, no radiators, no looking for the "right" contractor to repair things

Worth every penny of my higher taxes!

Good Luck!

So to me, the house sounds great! I'm in the DC region and houses darn near cost your first born for small homes. We built a 4 bedroom house 7 years ago in April and it's really fit our needs. However, I no longer consider our house new.

The only house that will work for you is one that hits the must haves on both your list and your husbands list. And honestly, you guys aren't even on the same page as to whether or not you WANT to move.

I humbly suggest you sit down with him and tell him you're not ready so you won't find a house that makes sense for you in any way, shape or form. Stop dragging him along though and making him think you will buy, when you aren't ready.

Stop talking yourselves in to house hunting just to talk your self out of every one you look at.

When you are ready, you will find the right one. Until then, stop looking. It's unnecessary stress.

Older homes are a labor of love, but for your situation, the money you don't pay in taxes is money you can put back into an older home to increase the value. It seems like a better return on your investment.

we live in one of the suburbs. bought a house we loved that is newer (built 15 years ago) like you loved the idea that it was move in ready with all the updated stuff. lovely neighborhood. less than a mile away is the next town. the difference in taxes is astronomical. We live in oswego and pay $8000 a year in taxes. montgomery less than a mile away pays $3500 a year in taxes It's crazy. half our neighborhood is oswego, half montgomery. We are listing our house this year because of the taxes. We thought it was worth it as we loved the house. But fully half our housepayment is taxes which means when we are retired and the house is paid off we will still have a huge payment for taxes alone. So nope for us it is not worth it. we are looking for an older home in a less expensive area.

J. you want our house lol. It's a beautiful 4 bedrooms 2 bathrooms upstairs, living room, dining room, kitchen and family room and bathroom on first floor and full basement, big fenced yard. And great schools. It's going on the market April 1st. Grade school a couple blocks away it's great but we only have 1 kid at home and hubby with rheumatoid arthritis. We are looking for a ranch in Montgomery.

all of our new construction in CA has either HOA or Mello-roose. Mello-roose adds thousands and thousands a year. We decided to go old contraction (40 years) for two reasons, they have bigger yards and no mello-roose community funding. The home was mostly remodeled. But there was a slab leak and things break all the time. Sometimes I think we made a mistake. But at the end of the day, you don't find 13,000 s.f. lots in So Cal unless the property is 30-40 years old. Lots run 6,000-8,000 s.f. with newer construction. So I'm not sad about it. One thing to ask yourself is what will your cash flow be like? If we were strapped, it would not be worth it to buy old. Its a couple thousand here and a couple thousand here all the time, and I know there is yet more to be fixed. So factor some of your decision on your cash flow. At the end of the day, we got our house under market by 5k. So, I think it was worth it. That is unless we get another slab leak.
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Oh, and I totally get why you are taking your time. Sometimes the inventory just isn't good and its hard to make such huge commitments when it doesn't feel right. Last summer the market was not good for buyers here at all (my husband business partner lost 10 houses before a bid was accepted) Here's my conclusion. Spending that kind of money never feels right. But you've kept tabs on the market so if things swing in your favor, you'll be able to recognize it. As for us, we got so priced out of our market and it just seemed like it would never work out. We took to praying about it and ended up in a whirlwind opportunity to buy our rental "as is" from our landlord who was forced to sell quickly due to the capital gains exclusion. Our stock investment were down and it just felt like such a bad time to buy. But honestly, looking back, I think it was Gods hand answering our prayer. So don't forget to pray about it.

The poster didn't say a "new" home, and she's not talking about "new construction." It's clear to me that she's speaking in *relative* terms. It's all relative to the particular market in particular suburbs, and since I don't know which suburb she's talking about, a 12 year old house may well be "newer"
in Chicagoland.

Where I grew up, 12 would be considered "newer." Many of my family still live there in the suburbs. There are homes, some of them beautifully renovated that are close to 100 years old or even older. This past December when visiting family, we had the occasion to be guests in one such house, and it was stunning. Many of the most exclusive suburbs in Chicago have homes that were built outside of what would be considered newer. So, I get what she means.

Anyway, that said, the financial picture in IL is of such great concern that if I lived there today, I'd be thinking of moving and would probably not invest in any properties taxed at the higher rates simply because taxes in IL are so out of control, and it's unclear at this point how they are going to dig themselves out of the underfunded pension disaster.

But IF you plan to stay in IL for the duration, buy the house you want, the house that makes you happy. You can't put a price on that. Your kids are still young, and you have plenty of years left where you'll all be in the house together. You need the room. Plus, you homeschool, and as the kids get bigger, your need for additional space will only increase.

I recall in the past you had some concerns about your husband's commute. If this house is a good fit for his commute, if it offers the space you want and need, and if you feel happy when you're in it and can envision your family living there, just do it.

Get a good house inspector to do a thorough inspection, negotiate a price you can live with, and go for it.

J. F.

To be honest, I have fixed up 2 homes over 50 years old and one 30 years old. We sold and broke even each time. I had to hire the work done because I have almost no skills. We did not make money except we didn't lose on rent.

We bought a house 2 years old then later built a brand new custom home. We found some issues that had to be resolved in both after the warranty had expired but we are talking less than $3,000 for both. The older houses cost us $23,000 and $35,000 to bring up to code and decorate by the time we sold them as new laws had gone into place. We paid cash so there was no bank inspector looking closely at the houses like we should have gotten instead of a home inspector the realtor recommended.
Not dealing with contractors and their mess....priceless!

To me, it seems like you're slicing this all kind of ways...but the bottom line is that the new house will be more expensive per year.
If you can buy the new home and the cost of living in the new home (taxes and mortgage-ideally a 15 year fixed rate, no ARMs) is no more than 25% of your net income? Why not?
If it's more than that PER MONTH? Pass.

J., I'm curious - how old does a house have to be to qualify for the lower tax rate?