Is Buying a Home Like Buying a New Car?

How does buying a new home compare to buying a car? Today, I’ll break down the key differences.

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I’d like to thank Brendon DeSimone from Zillow for the question of the day: “Is buying a home like buying a new car?”

When you drive a new car off the lot, it immediately loses some of its value. Does the same apply to real estate and, if so, should you care?

The main thing to know is that real estate appreciates. It doesn’t depreciate unless you’ve really bought the wrong property. However, in real estate, time is on your side. 

If you close on a home, the day after you close, you’ll be in what’s called a negative equity position. That doesn’t mean that you lost value; it just means that you’ve spent money and it hasn’t yet appreciated to make it worth your while to sell it at that time.

If you could stay in the home for three or more years, generally speaking (and especially in the interior of Alaska), you’ll be in a positive equity position.

This is opposed to buying a new car, which only continues to depreciate over time. You can look at economic trend graphs and see that, over the years, the real estate market is one of the best markets that we have in the country.

New cars only depreciate in value over time.

Another question is: “Does the new car theory apply?”

There are definitely pros to buying a new house versus an existing house, but you want to realize that, though your home may not be worth as much as a brand-new comparable home, it has appreciated from the time when you bought it. We don’t compare an old home to a new home when we’re doing price valuations.

The maintenance of a new home versus an existing home is also worth considering. You may believe that buying a new home will entail fewer maintenance tasks. In Alaska, there are preventative maintenance items that are necessary for any home. But a new home comes with warranties. The builder matters as well. If you’re buying from a reputable builder, you have product warranties on the appliances, a one-year builder warranty, and a 10-year structural warranty.

If you’re buying an existing home, one of the things to think about is buying a third-party warranty. That way, you can compete with the peace of mind that new homes bring.

Lastly, I want to make sure that you understand that it is a home first and an investment second. Even though buying a car that depreciates as soon as you drive it off the lot doesn’t seem to make sense, people see cars as a necessity. They want something comfortable to drive to work every day or something safe for their family. It’s the same thing with homes, so don’t get too wrapped up in the investment aspect of it. Just enjoy the home the same way you would with a car.

If you have any questions regarding real estate, feel free to reach out and contact me. I may use your question to make another video for the blog.

3 Areas of Impact That Will Make or Break Your Listing

If you’re struggling to move your listing off the market, there are three major impact areas you need to examine.

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 Looking to sell in Alaska? Get a free Home Price Evaluation

Today, we’ll be looking at the answer to an age-old question: “What should I do when my home isn’t selling?”

If you find yourself in this predicament, there are usually three major impact areas you should look at: 
  1. Price. The first thing your Realtor should do when your listing isn’t moving is to conduct a price analysis. This will show you how your property compares to the rest of the market. You and your Realtor will look at listings that are active, pending, and closed to see how your own listing stacks up. Now, there is a difference between getting no showings and no offers, getting showings but no offers, and getting both showings and offers. Where your listing falls within those three options will indicate its potential for success. 
  2. Condition. Certain issues pertaining to your home’s condition may be a matter of functional obsolescence. Some things, like floor plan and location, cannot be changed. These fixed attributes will typically be compensated for by a change in price. However, other aspects of a home’s condition can be altered. To get an idea of how your home’s condition comes across to buyers, think first about the feedback you’ve been getting from showings. Using this feedback, you can make informed decisions about how to upgrade your home’s condition. First impressions are important, so your listing needs to be in good shape. Also, never offer a credit to compensate for a conditional shortcoming. If the carpet needs to be replaced, just replace it. Don’t offer a credit for the buyer to do it themselves. 
  3. Marketing. The right agent will have a proven marketing plan with consistent results. They will be able to tell you how much online traffic your listing has received, for example. If this isn’t the experience your current agent is providing for you, it’s time to make a switch. Over 90% of all buyers start their search online, so your listing’s online presence must be second to none. 

Over 90% of all buyers start their search online, so your listing’s online presence must be second to none.

So, what happens if your listing misses the mark on all three of these areas? If that is the case, you need to utilize a rebranding strategy. If you’re curious about what a rebranding strategy is, give us a call or visit We would be happy to explain more about this strategy to you. 

As always, if you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.

Disclaimer: If your property is currently listed by another brokerage, this video is not intended to solicit your listing.