To buy a home or to build? That is the question. A question that faces many as they move into financial independence. Each option has its pros and cons. When you build, you can design the house exactly as you need and want but it will take some time. Buying means you get the house much quicker, but you may have to make some compromises on the plans and design. Before you decide on your next home, make sure you evaluate both sides of the conundrum and discuss all pros and cons with your real estate agent.
Building or Buying? The Pros and Cons to Getting a New Home
Building a House
The average time for a home to stay on the market is around 30 days, according to the National Association of Realtors. This means the competition to find a home is very steep. You can avoid this by building your own home. You also get to personalize the details of your house when you build and this means everything will be as you want from layout and flooring to the sinks, lighting, and paint. Building a new home also means you get more modern features and finishes as well as energy-efficient technology. There is no need for expensive maintenance or repairs right from the start.
The most frequently reported drawback for building a home is that you need to wait. It can take an average of seven months and this usually means you will have a gap of time between moving from your current home and moving in. You may have to cover the costs of renting during this time. In some cases though, most buyers can move into their new-to-them home just weeks after making the initial offer. Most buyers go into a home purchase expecting to negotiate pricing, but when it comes to building, there is not a lot of leeway on closing costs or purchase price. Having an experienced agent can help in this situation as they can bring a creative mind to the negotiation table. If your builder won’t bend on price, your agent may be able to work other incentives into the contract price.
With building, there are also unexpected expenses that have a funny way of sneaking up on new home buyers. Upgrades cost money and are not always rolled into your contract price. Play it safe by budgeting for only those you can cover with cash. Be prepared to ask the builder certain questions to help you budget more effectively such as:
- How much does your typical buyer actually spend on upgrades?
- What’s included in the base price?
- What will be an additional cost at closing?
Buying an Existing Home
Buying a home is less stressful, but the benefits for buying an existing home are mostly financial. Managing all the details that go along with building a home takes time and effort. Purchasing a home is usually less stressful because you have fewer decisions to make about the house such as floorplans, design, and soon. With buying an existing home, your real estate agent can also get you the best deal possible, you can move in right after closing, and you can upgrade at your own pace according to your budget. It does not have to be done all at once.
With buying a home, there is a higher risk you’ll face maintenance issues from the start. You can minimize this by having a professional home inspection done initially to identify potential problems before you close on the home. You may also need to update some of the features of an older home, but with the right negotiation skills, these older features can help you get a better deal on the price. You also need to remember that older homes come with higher energy costs as well as HOA fees.
Time to Decide
Every home buyer and every market is different, so it is best to work with a professional to size up the options when it comes to getting a new home. Your agent will know where the deals are, and they’ll help you decide whether building or buying will suit your needs best.