How to Find the Best Home Value

There are many factors to consider when you are trying to find the best home value.  Location, neighborhood amenities, insurance costs, flood insurance, HOA fees, types of mortgage loans and their costs, etc.  Then there’s the question of new construction vs. resale.  I will address each of these factors and provide some guidance to help weigh all the issues and come up with the best home value for you.

Here is an example of a home we can use as a test case.  6 Cross Gate Court is currently on the market for $279,900.  It is located in The Gates at Savannah Quarters, an upscale community in Pooler, GA with a security gate, swimming pool, clubhouse, and protective covenants.  Home owners in the Gates also have the OPTION of joining the nearby Savannah Quarters Country Club which provides a large swimming pool complex, tennis courts, private golf club, fine dining, fitness center, etc.  The developer is still building new homes in the community.


6 Cross Gate Court at $279,900 The Gates at Savannah Quarters Example of best home value



The best home value here will depend on several factors:

1. Price – A resale will typically sell for 10 to 15% less than a new home with similar builder and after market upgrades

2. Your time frame – A new home will typically take 5 to 7 months to build.

3. Choice of upgrades – You can pick your own colors and upgrades in a new home, but a resale can be a great value if you like the existing colors and upgrades.

4.  Mortgage costs – Some builders offer “incentives” if you use their mortgage lender.  Compare interest rates and closing costs before you commit.  In-house lenders can be expensive.

5.  Real Price – Builders usually quote a base price that seems to be a much better deal.  If you really want a very basic home, then go for it.  The home above at 6 Cross Gate Court for example, can be compared to the same model which can still be built by the builder for about $250,000 vs. the $279,900 for this resale.  But if you like the colors and upgrades in this home, a licensed appraiser recently placed the cost to build this home at $304,000, which does not include some $40,000 in after market upgrades (lifetime vinyl privacy fence, solar hot water heater, and others) that were added since.  Most new home buyers add quite a few upgrades when they initiate a contract to build and then add quite a bit more as the construction progresses and they pick out cabinets, appliances, lights, and fixtures.  Then they have a privacy fence and other upgrades after the purchase.  They often realize too late that they spent quite a bit more than the price of the resale that initially seemed expensive.  Rule of thumb – If more than 15% of the price of the existing home are things you wouldn’t pay a cent for, go with the new home.  If you would like to have the extra upgrades for free, take the existing home if the things you can’t change like cabinets and location appeal to you.


1.  Clubhouse and Swimming Pool – Many upscale neighborhoods feature amenities which can add to your enjoyment and a sense of community.  Finding the best home value means determining the value of these amenities to you.  If you will use the pool and don’t mind the inevitably higher HOA fees, then these are a good value to you.  They also increase the resale value if you plan to resell the home in the next few years.  If you are buying in a brand new community, it is best to be sure that the amenities have already been built or at least the money for them is in escrow.  A community in Savannah had this situation.  The developer died and the family decided to abandon the community.  They kept the money and the pool and clubhouse were never built.  My brother owned a home there and the price plummeted from $255,000 to his eventual sale price of $182,000.  Many foreclosures and short sales ensued and the outlook for the community is not good.

2.  Alternatives – Back to our example of 6 Cross Gate.  The Gates at Savannah Quarters is a gated community with its own clubhouse and pool.  HOA fees are a relatively modest $904 per year.  Nearby, Westbrook at Savannah Quarters has a much larger clubhouse with fine dining, a huge swimming pool complex, tennis courts, golf, fitness center, a manned gate, etc.  Their HOA fees are over $1400 per year PLUS $132 a month mandatory club membership PLUS $120 a quarter food minimum at the club.  Golf memberships have much higher fees than that.  Here’s the kicker.  You can live at The Gates and OPTIONALLY join the club at Westbrook for the membership fee only and skip the higher HOA fees and you still have The Gates clubhouse and pool as well.  When it’s time to sell your home, you haven’t saddled the new owner with a mandatory country club membership they may not want.

3.  Maintenance free communities – If this will be a second home, you might consider a maintenance free community.  For a relatively high HOA fee, your lawn maintenance and all exterior maintenance including painting, roof replacement, etc. will be covered – hopefully.  I live in one of these maintenance free communities in Westbrook at Savannah Quarters.  If you think this is for you, it may well be, but make the comparison before you buy:

  • If you buy a newer home and resell it in a few years, it may not need painting or a new roof before you resell it.  In this case, you have helped to fund these items for the new buyer when they are needed.  You don’t normally pro rate the remaining life of these items when you sell a home, so this has been an extra expense to you.
  • Check the books of the HOA.  If there aren’t enough funds to pay for these items when the time comes, the HOA will make an assessment to make up the difference and you pay anyway.
  • Before you buy, find out if there is an up front “capitalization fee” added to the purchase price to fund the maintenance account.  This is an extra cost to you.
  • These communities tend to have much stricter covenants.  Make sure you can live with them.
  • Consider the fact that you can hire your own landscaping company to maintain your lawn if you don’t buy in a maintenance free community.  Remember, when you hire your own landscaper, you control the quality of their work and you can fire them if they don’t get the job done.  Once again, this is a fixed cost you pass on to the buyer when you resell your property.
  • Total fees in my community include: Fairways HOA:  $225 a month; Westbrook HOA:  $1459/yr.  Mandatory Country club:  $132/month, Food minimum:  $120/quarter  TOTAL:  $509 PER MONTH OR $6108 A YEAR.  Obviously, I think I’m getting value for my money or I wouldn’t be here.  At the same time, I know that I have limited the potential buyers for my property when I am ready to sell.

I hope this blog post will be of value to you in evaluating your next home purchase.  Good luck in finding the best home value for you!

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