Top 10 Reasons Home Buyers Prefer New Homes vs. Used

Today's new homes offer more benefits than ever before. Here's a quick list of the Top 10 reasons why so many Homebuyers prefer new homes to used houses:

1) Design Your Dream Home Your Way: Why settle for someone else's choices when you can select your own cabinets, countertops, appliances, carpets and flooring? While you're at it, you can choose gorgeous bath and kitchen fixtures, lighting and other options that you love. Your new home will reflect your style, not someone else's taste.

2) Choose a Floor Plan and Room Layout that Meets Your Needs: Want a master bedroom on the first floor? It's yours. With massive his and hers walk-in closets? Done! Want high ceilings and a luxurious, resort-style master bath? Perhaps you'd like a sitting room with a fireplace in your owner's suite or French doors that open to your private patio or the pool? It's easy when you build your master suite your way.

3) All New, Under Warranty: A used home likely has tired products that may soon need replacing. Your new home — and the products that comprise it — are brand-new and under warranty. What's the cost to replace a roof, appliances, countertops or a water heater on a used home? Those components of your new home feature the latest designs and building materials and should offer you years of comfort and enjoyment before needing replacement.

4) Energy and Cost Savings: Today's new homes are far more energy efficient than homes built just five years ago. Versus homes built ten or 20 years ago, it's game over, advantage new. Why settle for drafty, energy-wasting, single-pane windows in a used home? Many new homes offer double or even triple-pane windows. Special window coatings and inert gases between the layers of glass are often available, saving you even more energy and money in both heating and cooling season. In fact, a 2016 survey by the National Association of Homebuilders found that 90 percent of respondents listed Energy Star appliances as an essential or desirable feature in their most-wanted list. Many new home builders offer state-of-the-art solar systems as an available option.

5) Comfort and Indoor Air Quality: Today's new homes meet stringent energy standards and codes not in place in the past. They combine high-performance energy efficiency with state-of-the-art ventilation and air filtration. The result is year-round, draft-free comfort and higher indoor air quality.

6) Low Maintenance: New cars today are computer-designed and computer-equipped. That's why they perform much more reliably than a car that's 15 or 20 years old. Homes are the same. Today's new homes have open floor plans and high ceilings that reflect the way we live today. They're also made of cutting-edge building products that require less care and maintenance. Another plus? The latest building systems and components are designed and engineered to work together.

7) Community Amenities: Many new homes are built in lavish master-planned communities with resort-style community centers, pools and clubhouses. Many new home communities also feature hiking trails, protected open lands and some of the best new schools and shopping near (or even within) your new home community.

8) Advanced Technology and Design: It's possible to replace all of the single-pane windows in a resale home with today's high-performance windows. It's also possible to add insulation to a used home. However, it's very expensive to replace dated appliances, cabinets and counter tops in a used home — and you still won't have the high ceilings you dream of on the first floor of an older two-story home. All are reasons to build your new home your way, to reflect the way you live today.

9) Safety: State-of-the-art circuit breakers. Electric garage door openers with infrared beams that stop if a tricycle or child is too near. High-efficiency furnaces and air conditioners that use the latest environmentally-friendly coolants. Sprinkler systems to provide fire protection. Cabinets, carpets and paints that use fewer volatile organic compounds, so that you and your family can breathe easier.

10) That New Home Feel: A used home was someone else's dream, not yours. It reflects their choices and family memories. You may learn to love avocado-green appliances (and you may be willing to scrub stained counter tops or grease-encrusted ovens and cook tops) but more and more people prefer that never lived-in feel.

After all, when was the last time you went to a department store and selected used clothes? Or visited a car dealer and paid more for a used car than a new car?

New homes offer the latest designs, style, comfort and quality. They provide a care-free lifestyle so that you can enjoy your home, not work on it and constantly spend money on repairs.

New Home Purchase Options

New homes can be purchased with Cash or Financed by a Lender with a mortgage loan. Builders normally require the Buyer to pre-qualify with their in-house or specified lender. Foreign Nationals need to apply with a Foreign Natinal lender because they do not have established credit or income history in the USA to qualify and most traditional lenders do not have Foreign National loan programs.

Contingent Purchases

Many builders will accept contingent purchases during slow market conditions, especially on newly released phases that will not be completed for up to 6-8 months.  This allows sufficient time for the Buyer to sell their current home.  Contingent offers are not normally taken on Quick Delivery Homes that are either completed to ready to close in 30-45 days.

New Home Reservation Process

Once a preferred New Home community, specific plan and building site are identified and selected by the Buyer, the next step is to submit an offer.  The offer can include the purchase price, requested upgrade concessions and Lender paid closing costs if  using the Builder's in-house Lender.  A pre-qualification letter and bank or account statement(s) will also need to be submitted with the offer to show pre-qualification status and proof of funds to close the purchase.  Foreign National Buyers will also need to show that their funds to close are located outside of countries with restrictions or limits on the amount of funds leaving the country.  A negotiated offer will normally require corporate approval.  Once the offer and any counter-offer is approved by the Parties, Buyer would submit a personal check or wire the funds to Seller's Escrow or Title company to reserve the home they have selected.  The reservation fee or lot deposit is typically either 3% of the Purchase Price or $10K to $50K and is applied to the final Purchase Price.

Generally, a Purchase Contract and Disclosures would be completed within 3-5 days after reserving the home site.  Once the contract is signed, the Deposit Fee is non-refundable if Buyer fails to perform and conclude the purchase.  If Seller's in-house lender is providing the loan and if Buyer is unable to obtain final loan approval, the Buyer's deposit woud normally be returned depending on individual builder policy.

New Home Community Team Organization

The New Home Community team typically consists of a Community Representative(s) in-house Lender, Construction Superintendent, Quality Care Manager, Design Center/Designer and Escrow/Title company personnel.

Model Terminology

Most new home builders have a site plan that shows the location of all home sites within the project and respective tract.  New homes are built and released for sale in Phases (typically 4-8 homes per Phase) and are designated by a Lot Number, physical street address and the Plan Type (for example Lot 1, Plan 2AR) that will use a system that specifies each Plan or floorplan.  All lots are pre-plotted with the specific plan and exterior color and brick/stone schemes pre-determined on each lot and approved by the county Building and Safety department prior to the opening of the new community and start of construction.

For example, Plan 2 refers to the floor plan, ie. 4 Bedrooms, 4.5 Bathrooms, Loft, 3,000 interior square feet, 2 car attached garage, 2 stories, etc).  The next letter A, refers to the Elevation or exterior architectural appearance - Spanish, Italian, Tuscan, etc.).  The next letter R, if applicable, refers to a Reverse (180 degree reverse floor plan with the same interior components).

The Base Price includes the price of the Home + Elevation Premium (if applicable) + Lot Premium (Lot Size, Corner or view lot if applicable.


Some Builders include many upgrade options in the Base Price (Everything Included by Lennar), but usually options are upgrades to the Base Price of the home and include Structural (California Room or Conservatory, additional bedrooms and bathrooms for example), electrical, plumbing, insulation and sound proofing, cabinets, countertops, backsplash and shower wall surfaces, interior paint colors, upgraded appliances, flooring (wood, tile and carpet choices), fireplaces, outdoor BBQ and kitchens and landscaping.  The options are selected at defined time periods during the construction process as follows:

Structural - Prior to foundation trenching and pouring the foundation slab (Conservatory, Additional bedrooms or bathrooms, etc.)

Solar - Mandatory on new homes with building permits pulled in 2020.


Cabinets, Counter tops, Back splash, Shower Surfaces, Staircase railings, fireplaces, interior paint

Appliances and Flooring

Outdoor BBQ and Kitchen, Landscaping

Other than structural and solar upgrade options, the Buyer will visit the Builders Design Center to select most upgrade options.  An additional deposit of 20%-50% of the option cost may be required by the Builder at the time of option selection and is non-refundable if Buyer cancels the purchase.  Homes include appliances except for refrigerator and washer/dryer.  The appliance can be upgraded from the standard appliance package and a refrigerator and washer/dryer can be included as options.  Window treatments and upgraded bathroom mirrors are additional options.  If a home hasn't been sold prior to the option selection dates, the Builder's Design Center will pre-plot many of the common upgrades.

Solar Options

A Solar Electrical System is mandatory on New Home in California with building permits pulled in 2020.  A 2KW system is the typical minimum size system and Buyers have the option to expand the capacity and add battery storage systems as an option with some builders.  Buyers can elect to own the system by financing the Solar Electrical System thru their mortgage payment or selecting a lease option with the power owned and provided by a third party under long term contract at a discounted power cost with the Homeowner.

Builder And Manufacturer Warranties

The Builder typically provides a material and workmanship warranty for a period of one to two years and a 10-20 year limited warranty for structural components like foundations and load bearing walls.  Other home components like appliances are covered under the manufacturer's warranty.  A separate home warranty can also be purchased for additional protection from third party companies.

Visiting Your Home During Construction

After purchasing your home, home site visits are generally limited to workdays after 4PM and Sundays when construction workers are not present.  Children under 18 years of age and visitors with open toe shoes or sandals are not allowed on the construction site.  Hard hats must be worn while on the construction site and a release of liability waiver is normally required as well.

55+ Communities

Communities for residents age 55+ are typically one-story single family homes with an optional second story loft or bedroom and bath for visiting family members and friends.  Separate clubhouse and recreation facilities are often provided with planned social events.  The home owner can be any age, but a Qualified Resident must be 55+ years of age living in the home.  The Qualified Resident's spouse can be any age, but a domestic partner must be 45+ years of age.  Usually limitations on visitation for younger people or children of 60 days during the year.

Mortgage Interest Allowable Deductions in 2020

Homeowners are allowed to deduct the interest they pay on as much as $750,000 of qualified personal residence debt on a first or second home mortgage.

Property Tax Allowable Deductions in 2020

For the 2020 tax year, there is a limit on your primary residence.  You may deduct up to $10,000 ($5,000 if married filing separately) for a combination of property taxes and either state and local income taxes or sales tax.

Moving Expense Deductions

The Tax Cuts and Jobs Act no longer allows a deduction for moving expenses in 2020.

Prop 60/90 Property Tax Transfer

Allows an individual who is over age 55 to sell his or her principal place of residence and transfer its base year value to a replacement dwelling of equal or lesser value that is purchased or newly constructed within two years of the sale.  This pertains to transfers in certain counties in the State of California.

New Home Buyer Rebates

What is a New Home Buyer Rebate?

The New Home Buyer Rebate is a form of referral fee sharing.  As Real estate Agents representing you in your New Home Purchase, we are paid a referral fee by the Builder when you purchase a new home.  To thank you for your participation in the New Home Buyer Rebate Program, we share a significant portion of our Builder Referral Fee with the Buyer.

Will I Receive Actual Cash Back? Who Pays Me My New Home Buyer Rebate?

You will receive a 1% New Home Buyer Rebate from Summit Real Estate Group within two (2) weeks of closing on your new home purchase.  This is considered taxable income and you will receive an IRS Form 1099-MISC following the end of the tax year you purchase your home.  If the Builder and Lender allow, you could alternatively receive the New Home Buyer Rebate in the form of either a closing cost credit with the Lender, an upgrade option credit with the Builder, or applied as a reduction to the Builder's Purchase Price.  In this case, the New Home Buyer Rebate would appear on the HUD 1 Settlement Statement and may also be subject to applicable taxes.

Are Rebates Legal?

Absolutely.  In California, as well as 40 other states, Real Estate Rebates are allowed.  According to the U.S. Department of Justice website (http://www,, the state of California "Allows brokers to offer rebates to consumers.

If I Am Already Using Another Real Estate Agent/Broker, Can I Still Get The New Home Buyer Rebate?

No, unfortunately you cannot.  Summit Real Estate Group must be exclusively representing you as your Real Estate Agent and the first Agent to register you in order for you to receive a New Home Buyer Rebate.  The Builder will only honor the first Agent/Broker that registered you.

I Already Signed a Contract With A Builder, Can I Still Get The New Home Buyer Rebate?

No, unfortunately you cannot.  If you contacted the Builder or visited the New Home Models and registered without an Agent, The Builder will not pay a Referral Fee.  Once the Builder has a signed, legal Purchase Agreement, there is no obligation for them to change the terms of the Purchase Agreement in order to pay a Referral Fee to a Real Estate Agent representing you.

Couldn't I Just Buy A New Home Without A Real Estate Agent/Broker And Ask The Builder To Pay Me The Full Commission?

No, unfortunately you cannot.  Per the California Department of Real Estate rules, the only people who can be legally directly paid a commission or Referral Fees in a Real Estate transaction are licensed Real Estate Agents/Brokers.  We are your key to unlocking additional savings through our New Home Buyer Rebate Program.

Why Don't More Real Estate Agencies Offer Rebates?

There are a couple of reasons.  One, many Agents that could offer the rebate do not because they are stuck in the old way of doing things.  Another reason, many Real Estate Agencies simply cannot afford to.  In the traditional real estate model, Real Estate brokerages have high overhead due to retail office space, managers, operations staff, franchise fees, etc.  Any commissions or referral fee earned are split between the Broker/Owner and the Real Estate Agent.  When a client does the initial on-line search and visits the models with their Agent, they are greatly reducing our time and resources.  By helping us reduce our overhead, we are able to pas the savings on to the Buyer.

If You Are Giving Away Part Of Your Referral Fee, Are Your Services Less?

No.  Beside getting the 1% Buyer Rebate, you are also getting a Team of seasoned professionals who know the New Home and Resale business inside and out.  Summit Real Estate Group and our business associates are a full service Real Estate Agency that specializes in New Homes with direct experience working with New Home Builder's in Southern California.  We provide assistance with reservation deposits, contract negotiations, upgrade option selection, home inspections and providing financing options.  The site agent for Builder represents the Builder's interest - we represent your interest.