What Could They Be Hiding?

Imagine you're shopping for a home, and you notice a number of low-priced foreclosures. You're also aware of new homes that appear to be priced higher for similar lot sizes and square footages.

At first, it may seem that a new home is too expensive. But, consider the possible costs of repairs and improvements for that "bargain" foreclosure — which might add tens of thousands of dollars to the sales price.

Likely expenses include appliances, electrical upgrades, windows, flooring, carpeting, cabinets, plumbing, roofing ... Compare that to new homes that require none of these additional costs, and instead have extended warranties on construction, appliances and equipment ... plus independent third-party inspections.

So... beware the hidden costs of those foreclosure "deals."

In a head-to-head comparison, newly-built homes easily outdistance foreclosures — as a strong new trend. Among the key benefits for new homebuyers:

• New homes are far more energy-efficient and "green," with highly rated windows, roofs, insulation and appliances. They also come with the wiring and spaces needed for most consumers' high-tech information and entertainment preferences.
• Newly constructed homes allow the buyer to "choose what you want" in floor plans, equipment, landscaping and amenities.
• Builders often offer closing-cost and upgrade incentives and settlement costs.
• Financing is almost always easier, since builders normally have an affiliation with a lender.

The overall costs of new homes are built into the price. On the other hand, you often have no idea what your final expenses will be with a foreclosure because you buy it "as is," typically with no professional inspection, and you can't be totally sure where that might take you. Do your own comparisons, and you're more likely to end up making the most intelligent choice.