New Construction vs. Existing Homes: A Twin Cities Buyer's Guide
Reviewing the pros and cons of purchasing a new home vs. one that has been pre-loved.
If you're shopping for a home in the Twin Cities area, one of the biggest decisions you'll face is whether to build new or buy an existing home. As someone who has not only built my own home in Lakeville, but also sold 80+ new construction homes as a builder's agent before helping countless families find their perfect existing homes, I've seen both sides of this decision up close.
Let me walk you through the real pros and cons of each option to help you determine which path is right for your family's specific situation.
New Construction Homes in the Twin Cities: The Pros
1. Everything is Brand New (Hello, Warranties!)
There's something special about being the first family to create memories in a home. New construction means new appliances, new systems, new everything—which translates to fewer maintenance concerns in those early years of homeownership.
In Minnesota, state law actually requires builders to provide tiered warranties: 1-year coverage on all craftsmanship (think cabinet doors, trim work, and general fit and finish), 2-year coverage on mechanicals and systems (HVAC, plumbing, electrical), and 10-year coverage on structural components. This comprehensive protection gives you peace of mind during those crucial early years of homeownership. One important note: appliances typically come with separate 1-year manufacturer warranties that you'll need to register after closing—I always remind my clients to complete this step so they don't miss out on coverage!
2. Modern Floor Plans Designed for Today's Families
The open-concept layouts, primary bedroom suites, and mudroom spaces that are often on buyers' wish lists come standard in most new constructions around Twin Cities communities. These homes are designed with modern family life in mind—think homework spaces, drop zones for backpacks, and kitchen islands perfect for both meal prep and homework help.
I've watched countless clients fall in love with the functionality of new builds, especially those moving up from starter homes with more traditional layouts.
3. Energy Efficiency That Saves Money Long-Term
Minnesota winters can be brutal on your heating bills, but new construction homes are significantly more energy-efficient than homes built even 10-15 years ago. Enhanced insulation, energy-efficient windows, and modern HVAC systems can lead to substantial utility savings over time.
4. Personalized Finishes That Match Your Style
When building new, you can select everything from cabinet styles to flooring to lighting fixtures (depending on your builder and stage of construction). This means creating a home that reflects your personal style without the hassle of renovating later.
The design centers at many of our Twin Cities builders offer incredible selection options. I still remember the excitement on my own face (and my clients') during design appointments—it's like bringing your Pinterest boards to life!
5. Competitive Financing Options
Most builders in the Twin Cities area have relationships with preferred lenders who offer competitive rates and often incentivize buyers with closing cost credits when using their services. These relationships can sometimes make the difference in affordability, especially for move-up buyers balancing two housing payments.
I've seen closing cost credits ranging from $5,000-$20,000 in addition to interest rates 1%+ lower than what is available on the traditional market. This combination can have a significant impact on buyer’s finances and offset the higher price point of new construction.
New Construction Challenges to Consider
1. Extended Timeline from Contract to Move-In
Patience is required when building new. In today's Twin Cities market, most builds take 6-10 months from contract to completion. If you're growing out of your current space or have school timing considerations, this extended timeline can be challenging.
I always have a detailed conversation with my clients about timing expectations—especially for families with young children who might be planning around school years or those expecting new additions to the family.
2. Higher Initial Price Point
Generally speaking, you'll pay more per square foot for new construction in the south metro area compared to existing homes of similar size. While this gap has narrowed slightly in recent years due to rising resale values, it's still a consideration for many buyers.
The tradeoff comes in reduced maintenance costs up front and potentially lower utility bills—but the initial investment is typically higher.
Existing Homes in the Twin Cities: The Pros
1. Move-In Ready on Your Timeline
When timing matters, existing homes shine. From offer acceptance to moving day can be as quick as 30-45 days, making this option ideal for families with specific timing needs, whether that's a new job start date or catching the beginning of a school year.
This quick turnaround has been crucial for many of my clients, especially those who sold their previous home faster than expected—which happens frequently in our current south metro market!
2. Established Neighborhoods and Mature Landscaping
There's something special about neighborhoods where the trees have grown tall enough to provide shade for backyard barbecues. Established neighborhoods throughout the south metro area offer mature landscaping, developed community amenities, and a sense of character that new developments are still growing into.
Plus, you can actually see how the neighborhood functions—who's out walking dogs, where kids play, and the general vibe of your potential new community.
3. More Square Footage for Your Budget
Your housing dollar typically stretches further with existing homes in most Twin Cities suburbs. The price-per-square-foot differential means you might be able to afford that extra bedroom or the basement space your growing family needs.
For example, a $650,000 budget might get you a 2,800 square foot new build in Lakeville, but could potentially secure a 3,500+ square foot existing home in the same neighborhood.
4. Character and Craftsmanship
From charming woodwork in established neighborhoods to the unique architectural details in older homes throughout the south metro, existing properties often feature craftsmanship and character that's hard to replicate in new construction without substantial upgrades.
I've had clients specifically seek out existing homes because they fell in love with features like built-in bookcases, wood-burning fireplaces, or the unique character that comes with a home that has a history.
5. Immediate Sense of Space and Flow
With existing homes, what you see is what you get. There's no trying to visualize how your furniture will fit based on a paper floor plan or model home tour. You can immediately sense how your family will use the space and whether it works for your lifestyle.
Many buyers find it particularly challenging to visualize their future home during the framing stage of new construction, when there are no walls separating spaces yet. That open skeleton of 2x4s can make even spacious rooms feel small or leave you questioning if your sectional will fit in the family room.
This tangible understanding of space has been the deciding factor for many of my clients who struggled to visualize their daily lives from builder floor plans alone. I've walked through countless framed-up homes with clients who looked completely overwhelmed trying to imagine their furniture and daily routines in what was essentially just an outline of their future home.
Existing Home Considerations to Keep in Mind
1. Potential Maintenance Issues and Updates
Older homes may come with older systems and potential maintenance concerns. While home inspections help identify immediate issues, buying an existing home means preparing for updates and repairs that may arise sooner than with new construction.
I always recommend my clients budget 1-3% of their home's value annually for maintenance when purchasing an existing home—an important consideration for financial planning.
2. Compromise on Wishlist Items
Finding an existing home that checks every box on your wish list can be challenging. Many buyers end up compromising on certain features or planning future updates to create their perfect space.
I work closely with my clients to identify their non-negotiables versus nice-to-haves, which helps focus the search on homes that meet their core needs while accepting that some dream features might come later through renovations.
3. Competitive Market Conditions
The inventory shortage in the Twin Cities market has made competition fierce for well-maintained homes in desirable south metro neighborhoods. Multiple offers are common, especially for homes in prime condition and locations.
This competition often means making quick decisions and potentially paying over asking price—a reality that can be stressful for buyers, especially those also trying to sell their current home.
Making the Right Choice for YOUR Family
After helping hundreds of Twin Cities families through this exact decision, I've learned there's no one-size-fits-all answer. The right choice depends entirely on your family's specific:
Timeline: How quickly do you need to move?
Budget: What's your comfort level with initial investment versus long-term costs?
Priorities: Which features are absolute must-haves versus nice-to-haves?
Lifestyle: How does each option align with your family's daily routines and needs?
I remember sitting exactly where you might be now—toggling between builder websites and MLS listings, trying to make this same decision for my own family. It can feel overwhelming, but having a guide who understands both markets makes all the difference.
Let's Find Your Perfect Twin Cities Home
Whether you're leaning toward that brand-new construction in a developing neighborhood in the suburbs or an established home with character in South Minneapolis, I'd love to help you navigate this important decision.
Having experienced both sides—as a homeowner, as a builder's agent, and now as a realtor serving move-up buyers throughout the south metro—I bring unique perspective to your home search journey.
Ready to explore your options?
Let's connect for a buyer consultation where we can discuss your specific needs and create a customized plan for your home search, whether that leads to a builder's design center or the perfect existing home.
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