Housing...Inside and Out

July 16, 1999
Consider The Advantages And Disadvantages of Buying An Older Home

Buying an older house is a popular method of improving the family's residential environment. Despite its popularity, numerous decisions and important considerations will challenge each buyer of a pre-owned house.

Often the home buyer will be overwhelmed by an abundant variety of floor plans, styles, materials, prices, qualities and methods of financing; all of which will influence the family's happiness and security.

The inexperienced buyer may not be able to find a single expert who can accurately advise on all facets of purchasing a house. Thus the homebuyer must gain a general understanding of the buying process and know how to obtain professional assistance when advisable.

Before you examine specific houses and investigate financing methods, you should begin by carefully weighing advantages and disadvantages generally associated with purchasing an older home rather than a new home.

Frequently more space is available for the money invested, especially if the owner is under pressure to sell and to move. You must consider that although a large amount of space may be available, the floor plan may not be sufficient for modern activity and storage needs.

If the house needs repair, the buyer for an additional investment of his or her own money and time may improve it. But the visible improvements may be a waste of money and time if important structural and utility systems are deficient.

The price and value of a pre-owned home are more likely to be established and not related to the stylist features that may become out of date quickly. At the same time, the resale value of older houses may depreciate less than new houses depending on the location and condition, as well as other factors.

While looking at an older home to purchase, it is easier to predict the cost of taxes, assessments, utilities and insurance because these expenses have established a relatively stable pattern over time. A disadvantage may be that the operating expenses for the utilities and maintenance may be more expensive on an older home than on a new home.

While it may be possible for a buyer to assume the seller's mortgage at a favorable interest rate, this is not always possible. Financing an older home may require a higher down payment, shorter repayment period and a higher interest rate.

The neighborhood character and traffic patterns are often well established where an older home is located. It may be easier to predict that family's satisfaction with the location. One must also consider that the neighborhood may have surpassed its peak of desirability and be deteriorating both physically and financially.

The buyers must carefully examine older houses to be sure they are not purchasing problems the sellers are attempting to abandon.

After comparing the advantages and disadvantages of buying a pre-owned house, the question should be asked, "Is an older house the best housing alternative?" if the answer is yes, the evaluation process will provide an initial insight into general factors to consider when comparing pre-owned houses. One will also be ready to examine other important points such as families' needs, wants and activities, as well as the amount that can be spent for housing.


Written by Dr. Francis Graham (Retired)

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