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Loading...Loading...A resale house is a home that has already been owned and is now up for sale again, as opposed to a brand-new home.
If you've been looking at listings, you may have noticed that most of the homes for sale aren't brand new. They've been lived in by other people. A resale house is what that is. Someone bought the house, lived in it for a while, and is now selling it to the next person. The property could be anywhere from five to one hundred years old. The main difference is that it didn't just come off the builder's lot.
The National Association of REALTORS® calls these sales "existing-home sales," and they make up most of the housing market in the U.S. According to the U.S. Census Bureau, NAR's most recent monthly report showed that about 4.35 million existing homes were sold at a seasonally adjusted annual rate, while about 679,000 new homes were sold during the same time period. In other words, for every new house that sells, about five or six used homes are sold.
The Multiple Listing Service is a database that real estate agents use to share information about properties. You can find resale houses on this site. Some sellers use agents to list their homes, while others sell them themselves. No matter what, you're buying a house with a history, and that history affects everything from the price to the state of the plumbing.
Why should any of this matter to you? Because buying a home can be very different depending on whether you buy a resale or a new home. Knowing what a resale house really is can help you choose the best path for your budget, your time frame, and how much work you can handle.
People don't realize how many moving parts there are in a resale deal.
The seller puts the house up for sale, usually with the help of a real estate agent who sets a fair asking price based on sales of similar homes in the area. Buyers make offers, and then both sides talk about the price, the closing date, repair credits, and other things that could go wrong, like the home inspection and appraisal. A title company will confirm legal ownership and take care of the closing paperwork once both parties sign.
Leverage is one thing that makes resale deals different from new construction contracts. When you buy from a builder, you are dealing with a business that has set prices and rules. When you buy a resale home, you're dealing with a private seller who may be doing it for personal reasons. They might have gotten a new job. Maybe they're cutting back. That motivation can give you a lot of power when it comes to negotiating, especially if the home has been on the market for a while.
The way the appraisal works is also important here. Before your lender approves your loan, they will send an appraiser to check the home's market value. When it comes to resale homes, the appraiser has a lot of sales data to work with because there are almost always similar homes that have sold recently in the same area. That's not always true for new homes in developing neighborhoods, where there may not be enough comparable homes to back up the builder's asking price. AmeriSave can explain how the appraisal process works and what to expect when you buy a home to sell.
There's a reason resale homes dominate the market. They come with some genuine advantages that new builds can't always match.
Homes that are brand new usually cost more. The U.S. Census Bureau and HUD say that the median sales price of a new home was about $446,300 in a recent monthly report. The National Association of REALTORS® says that the median price of an existing home was about $396,800. That difference of about $50,000 will have a big effect on how much you can afford to pay each month, how much you can put down, and how much house you can buy.
This is actual money. Let's do a quick example. If you put 10% down on a $396,800 home that you want to sell, Your loan amount is about $357,120, and your down payment is about $39,680. If you were buying a new house for $446,300 and putting down 10%, you would need $44,630 upfront and borrow about $401,670. If you have a 30-year fixed loan with a 6.5% interest rate, the difference in loan amount means you will pay about $280 more in principal and interest each month. That's an extra $3,360 coming out of your pocket over the course of a year.
I love that the trees in older neighborhoods in Louisville have had decades to grow. The streets have a lot of personality. You can walk around and see how people really live there. Most of the time, resale homes are in neighborhoods that are already full. The parks have been there for years, the grocery stores are built, and the schools are open. You're not moving into a place that's still being built and waiting for the neighborhood to finish taking shape.
When you buy a resale house, the home already exists. You're not waiting six months or a year for a builder to finish framing, wiring, and landscaping. Once your offer gets accepted and you close, you can usually move in within 30 to 45 days. That speed matters a lot if you're on a tight timeline, like a job relocation, a lease ending, or a growing family that needs more space right now.
Individual sellers usually have more freedom than builders. If the inspection shows that there is a problem with the roof, you can ask the seller to fix it or lower the price. You can often ask for credits on closing costs. You can suggest a shorter or longer closing window, depending on what works best for both of you. AmeriSave can help you figure out what kind of financing terms might give you more power to negotiate when you sell something.
Homes that are for sale again aren't perfect. Older homes have older systems, which can mean extra costs later on.
The most important thing is putting off maintenance. A house that has been lived in for 20 or 30 years may need a new roof, new plumbing, or new electrical wiring. These problems aren't just skin-deep. Depending on the size and materials, a new roof can cost between $8,000 and $15,000 or more. Rewiring an older home can cost between $10,000 and $20,000. If you don't plan for those costs, they can add up quickly.
Costs for energy can also go up. Newer homes usually have better insulation, double-pane windows, and appliances that use less energy. Homes that are for sale may still have old HVAC units, single-pane windows, or insulation that isn't up to date. It costs more to add all of that later than it does to build it in from the start.
And then there's the style part. Not everyone wants a house that was built to fit someone else's style. It costs money and time to rip out old carpet, tear down a wall, or redo a kitchen. If you love the bones of the house but hate the finishes, just make sure you know how much it will cost to fix them up before you buy.
There can also be problems with the title of homes that are for sale. Liens that haven't been paid, boundary disputes, or unclear ownership history are sometimes found on older properties. Most of these problems won't happen to you if you have title insurance, which your lender will require at closing. There are times when a title search on a resale home will turn up surprises that slow down the process. Most of this is taken care of by your real estate agent and the title company, but it's good to know that it can happen so you're not surprised.
This is one of the first things I hear from friends and coworkers who are thinking about buying. Which is better? The truth is that it all depends on what you want.
You can pick the finishes, the floor plan, and even the lot when you build a new house. Everything comes with a warranty. You are the first person to use the sinks and walk on the floors. A lot of people like the feeling of starting over, and there's a good reason for that. But you'll have to wait longer, pay more, and have less room to negotiate the price.
You can choose where to live with resale homes, but you can't with new builds. If you want to live in a certain school district or close to downtown, resale homes are probably the only ones that will be available. You also get something that is harder to measure: your character. There are crown molding, hardwood floors that have seen better days, and built-in bookshelves that someone cared enough to add. You can't find that kind of information in a builder's catalog, and it takes years to build up.
The steps are mostly the same whether you buy a new home or a resale if you are getting a mortgage. You will still need a clear title, an appraisal, and preapproval. AmeriSave helps people with both types of deals. The main differences are in the timeline, how the negotiation works, and what you get for your money. After your offer is accepted, it usually takes 30 to 45 days to close on a resale. On the other hand, a contract for new construction could take six months or more, depending on the builder's schedule and any delays in getting permits.
If money and location are the most important things to you, I tell people at work to look closely at resale homes. If you want more options and a longer warranty, it might be worth it to pay more for new construction. There is no one best choice for everyone. It's all about the choices you're willing to make.
Buying a resale house without doing your homework is a gamble. You can reduce that risk with a few concrete steps.
I don't think you should be able to change this. A professional inspector goes through the property and checks things like the roof, the foundation, the electrical system, the plumbing, the HVAC, and more. The American Society of Home Inspectors says that about 84% of people who buy a home hire an inspector, and there is a good reason for this. Depending on the size of the home, the average inspection costs between $300 and $500. That's not a lot of money for the information you get back.
If the inspector finds something wrong, like a cracked foundation or old wiring, you can use that information to either lower the price or ask the seller to fix the problem before closing. In many cases, that one report will save you thousands of dollars. I heard coworkers at AmeriSave talk about times when an inspection found a $12,000 foundation problem that the buyer didn't know about. It's not worth it to skip this step to save a few hundred dollars.
Drive through the area at different times of the day. If you can, talk to your neighbors. Check out the ratings of schools in the area, the crime data from your local police department, and the types of businesses and services that are close by. A great house in a neighborhood that doesn't fit your lifestyle will quickly become a source of stress. As part of your home search, AmeriSave's ComeHome can help you look up property values and neighborhood trends.
Most states require sellers to fill out a disclosure form that lists known problems with the property. This might include past water damage, a history of termite issues, foundation repairs, or lead paint if the home was built before 1978. Read this document carefully. If something seems vague or incomplete, ask your real estate agent to follow up before you move forward.
Your agent can get "comps," which are sales data for homes that are similar to yours in the same neighborhood. This will help you figure out if the asking price is fair, too high, or maybe a good deal. The Federal Housing Finance Agency says that home prices have been going up in most markets. This means that you can use comps to make sure your offer is in line with the current market conditions instead of just guessing.
Before you start making offers, AmeriSave can also help you get preapproved so you know exactly how much money you can borrow. When it's time to negotiate, knowing that number gives you confidence.
A resale house is a house that has had other people live in it before. Most of the homes for sale fit into this group. Have a good inspection done. Do your own research on the area. Before you walk through the front door, make sure you know how much money you have to spend. Resale homes usually cost less, are in a better location, and close faster than new construction. However, they also need maintenance that you should know about ahead of time. AmeriSave can help you look into your options and get preapproved if you're thinking about buying a resale home and want to know what kind of mortgage will work for you.
A resale home has been owned and lived in before. A new construction home is a house that has never been lived in before and was built just for that person. Homes that are for sale again are usually less expensive. According to the National Association of REALTORS®, the average price of an existing home is $396,800. According to the U.S. Census Bureau, the average price of a new home is about $446,300. You can get a loan for either type of home through AmeriSave (amerisave.com/mortgage-rates). Both of them go through the same steps.
Yes, in most cases. Resale homes are usually cheaper than new homes because the materials and design choices show how old they are, not how much it costs to build them now. Depending on where you live and how much demand there is in the area, the price difference can be anywhere from $30,000 to $60,000 or more. If money is your main concern, you can use AmeriSave's prequalification tool to help you find the right price range for your budget.
Most states don't require a home inspection, but it's a good idea for buyers to get one anyway. The American Society of Home Inspectors says that about 84% of buyers hire an inspector. The average price is between $300 and $500, which isn't much compared to what big repairs could cost. AmeriSave's website, amerisave.com/learn, has information on every step of the home buying process.
Tell your real estate agent to find out how much homes like yours have sold for in the same area. These "comps" show how much other people have paid for homes that are about the same size, have the same number of bedrooms, and are in the same condition. You can also use the Federal Housing Finance Agency's data on changes in home prices by region. You can also use ComeHome by AmeriSave (amerisave.comehome.com) and other tools to figure out how much a home is worth.
The most dangerous problems are those that aren't fixed right away or that aren't clear. If you live in an older home, you may need a new roof (which can cost between $8,000 and $15,000), electrical upgrades (which can cost between $10,000 and $20,000), or plumbing repairs. A professional home inspection lowers this risk by finding problems before the sale. You can use AmeriSave at amerisave.com/prequalify to find out how much it will cost to buy a home, including any repairs that may need to be made.
Yes, getting a mortgage is the same for both of them. Before you can close, you need to get preapproval, have an appraisal, and check the title. The main difference is when they take place. It usually takes 30 to 45 days to close a resale deal, but it can take months to close a new build. Every day, lenders like AmeriSave help people buy homes to resell. Most of the time, the loan programs they offer are the same.
Look for stains on the walls and ceilings that could be from water damage. Make sure the doors and windows open and close easily. Also, look for cracks in the foundation or outside walls. Look at the toilets, lights, and faucets. The American Society of Home Inspectors says that structural and water problems are two of the most common issues in older homes. The Resource Center at amerisave.com/learn has advice on how to look at houses.
Most of the time, you will close on a resale home 30 to 45 days after you sign the purchase agreement. But this could change. If the appraisal is low, the inspection shows big problems, or there are problems with the title, things could take longer. The Consumer Financial Protection Bureau says that buyers should expect the lender to take at least 30 days to process the loan. Before you start shopping, you can speed things up by getting preapproved.
How much money you have, how long you plan to stay, and what the housing market is like where you live all play a role. Buying a home that someone else has already lived in can help you build equity over time. With a fixed-rate mortgage, you might also be able to lock in a monthly payment that stays the same. The National Association of REALTORS® says that the average price of a home that is already built in the US is about $396,800. You can use AmeriSave's mortgage calculators to see how much it costs to buy a home each month instead of renting one.
Most homes that are sold again become more valuable over time. However, in the short term, their value can go up or down depending on the market and where they are. The Federal Housing Finance Agency's House Price Index shows that home prices have been going up steadily across the country for a long time. Taking care of the property, making smart improvements, and picking a good location are all ways to keep your investment safe. You can use AmeriSave's ComeHome to find out how much homes are worth in your area.
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