By Kate Wood
A record 15% of Americans plan to buy a home in 2025. Buyers should consider turnkey homes, new builds or fixer-uppers strategically.
NEW YORK — Hoping to buy a home in 2025? You’re not alone. There’s much demand for so few listings, home buyers are wise to make their home searches as broad as possible. “It’s crucial to focus on what truly matters if you are searching in a market with limited inventory,” explains Jenna Stauffer, real estate broker with Ocean Sotheby’s International Realty in Key West. “Define your non-negotiables — location, number of bedrooms and bathrooms, square footage, and key features — then be flexible on the rest.”
Condition is one area where you might be flexible. There are pros and cons to fixer-uppers versus turnkey properties, or to whether you buy or build a house. Here’s what you should know about each as you decide on the scope of your home search.
Buying a turnkey home
Upsides: All you need to do is move your stuff in — after, of course, going through the entire home buying process of making a successful offer, getting a mortgage and closing on the home. A turnkey home also allows for the widest variety of financing options.
Downsides: With so little inventory on the market, existing homes that are in tip-top shape go fast.
Pro tips: To snag a turnkey home, act decisively. “If a property checks your must-have boxes and you’re financially ready, be prepared to make an offer quickly,” Stauffer says. Have a mortgage pre-approval in hand, and make sure that your real estate agent knows your budget as well as any contingencies you’d be willing to offer a seller.
Building a new home
Upsides: A new home built for you skips some steps in the buying process, since you’re likely looking at a much shorter search and way less competition. Another perk of new developments: The builder may offer incentives, like upgraded amenities or even an interest rate buy down, helping your budget go further.
Downsides: The timeline for new construction can get derailed if there are issues with finding material or labor, so you may need to be flexible on your move date.
Pro tips: Understand your financing options. Building the home, you’ll need a construction loan to finance both the building phase and the completed home. Construction loans require higher down payments, and depending on the loan type, financing a home in a development is simpler, since the builder’s covering construction costs. The builder may offer you financing, but you’ll want to compare their interest rate and terms with other lenders.
Renovating a fixer-upper
Upsides: Buying a home that needs some work could potentially help you afford a property that’s larger or in a more desirable neighborhood than your budget would otherwise allow. Renovating a home also gives you the chance to customize it to your needs and style, make energy-efficient upgrades or preserve the home’s unique charm and character.
Downsides: Renovations are a lot tougher — and messier, and more time-consuming
Pro tips: Know what you’re getting into. Work with an experienced home inspector to determine what needs to be addressed. Walk-through with a contractor, gives you a more concrete idea of the scope of the work and the potential cost. Most contractors will charge a consultation fee that’s refunded if they’re hired. You might consider financing the purchase with a renovation loan, which is a mortgage that covers the costs of repairs as well as the home’s price.
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