Saturday, March 8, 2014

How to Buy a House

You feel the time has come for you to buy a house.

Before you start looking around for a suitable house to buy, you will have decided on your exact needs in terms of space and amenities, will have worked out your budget and at least tentatively tied up loans/mortgages, etc. All these are issues of hard facts and can be tackled in a pretty straight forward manner.

But there is one question which is emotional and needs a little soul searching. Do you want to buy - an old house or a new house?

Let us draw a balance sheet of the pros and the cons of the old house and the new houses.

Modern new houses are generally designed to use space more efficiently and provide more amenities such as bathrooms, kitchen space, etc. as compared to the old houses. They are designed for technology-rich modern life and have adequate provision for modern gadgets like telephones, computers, etc throughout the house. Modern architecture and equipments such as heating/ventilation, etc are more energy efficient, resulting in lower energy bills. Since they are generally a part of a large housing complex, they will have provision of swimming pools, golf course, clubs, etc. Being new, it is obvious that they will require very little repair and maintenance expenditure for a few years. In any event, new houses are generally covered by a one year warranty.

New houses are built in less developed areas and being a part of a housing complex will not have any "character"; all houses will be practically identical. In such a housing complex you cannot be very certain of the type of neighborhood you will have. There will be restrictions on renovations and modifications you may wish to make. New houses are generally costlier due to escalating land costs and labor costs. Even though the repair and maintenance expenses will be less, you may have to pay common house owners association charges.

Old houses (we are not talking of "ancient" houses) are generally situated in well developed neighborhoods with schools, banks, marketplaces, entertainment centers in the vicinity. The neighborhood is already being lived in. Old houses, about 15 year old, were generally what we can term as "single family houses", they were not a part of large group housing or housing complex and so had a certain character of their own. Being old, lived-in houses, they come with developed landscaping. Use of a large amount of woodwork and high ceilings, etc lent a certain ambience of leisure and luxury to the old houses. Old houses are generally situated on prime property and may have good resale value. Old houses are comparatively less costly; also their prices are generally negotiable.

But after all old houses are, well, old! Old houses were not designed for the modern life and may not have the provision for telephones, computers, etc. that modern homes use. The buildings as well as the equipment such as heating/ventilating equipment, etc. may not be as energy efficient as in a modern house. The regular repair and renovation of an old house can be a burden unless attended to before purchase. Some people may feel comfortable with the lived-in character of an old house; others may shun away from the personality of the old owner that the old house may show.

There are non-tangible factors such as character, modernity, etc involved in this comparison and ultimately it is your personal preferences that will decide whether you opt for an old house or a brand new house.

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