Building vs. Buying: Your guide to the pros and cons of building and buying in the Current Residential Real Estate Market
You’ve heard rumors about the hectic real estate market, but now you’re trying to navigate the journey of finding your dream home. According to HUD, the median existing-home price has doubled in the last ten years. As existing homes continue to fly off the market and prices grow out of reach for some, you may be considering building a home instead. Here is an overview of the pros and cons of building and buying.
Who doesn’t love that new car (or home) smell? Purchasing something brand new is exciting, and a newly-built home is no exception. A sparkling new house sounds like a dream, but there are pros and cons that go along with it. One of the pros of building a new home is that you won’t have to compete with other buyers. There is no competition once you have selected your builder and land.
Another pro is that a newly-built home is move-in ready and has been customized to suit the lifestyle of the owners. With modern features like open floor plans, large kitchens, and luxurious bathrooms, a new home gives you the ability to settle down quickly and seamlessly.
The idea of a low-maintenance home probably sounds appealing to you. The honey-do list with a new home is virtually non-existent! Forget about being a diy-weekend warrior; your home will be perfect from the start.
New homes are more energy efficient than older homes. This means monthly savings on energy bills, which is another bonus.
You’ll be saving on maintenance and energy, but that’s about it.
The largest con associated with building a home is the overall price tag. Building a custom home is much more expensive than buying an existing home. With the rising cost of nearly everything, the price tag of your home is that much more important. Many families are discovering that their buying power has gone down and therefore, so has their budget. A new home may not be feasible.
To add to the fact, there are hidden expenses with a new home. Upgrades and changes can add up quickly. A builder’s estimate may include base prices and it is tempting to upgrade appliances, fixtures, counter tops, cabinets, etc. It can get out of hand quickly and unexpectedly. There will be other hidden expenses after you close on your newly-built home like landscaping, window treatments, and other furnishings.
It can be surprisingly expensive to move into a new home. Let’s look at the pros and cons of buying an existing home.
Shopping for a new home can be fun and exciting (view our current listings here!), but in the current market it can become stressful as you compete with other buyers. Existing homes can go under contract within hours of coming onto the market, and the average home is sold in 20 days. The market moves fast but if you’re willing to go along with the ride, it may pay off significantly!
The largest pro of buying an existing home is the initial cost.
Buying an older home can be drastically more affordable than building. Not only are the costs of buying less than building, but negotiation is a huge factor. You can negotiate nearly anything when buying an existing home; there is less wiggle room when building. Negotiating saves buyers even more money!
Many families stay diligent during their home search for this reason alone. The average new home takes 7 months to build. You can buy an existing home much more quickly than waiting for a home to be built. This saves money and time.
Most new homes are built in new neighborhoods, mainly in the suburbs. This means that the home’s location is further away from the city’s center, which makes commutes longer. Purchasing an existing home often means that you’ll be living in a neighborhood with better proximity. A shorter commute means even more savings.
Other Considerations of Buying an Existing Home
The dynamic of an established neighborhood is clearly visible to the buyer. You can see what the neighbors’ homes are like, and how well cared for they are, before you commit. In a new neighborhood, this isn’t an option.
Existing homes have character. New homes can’t compete with the charm of an older home. Current home décor trends are proving that what’s old is new! An existing home may have a few quirks, but it also might have more elaborate moldings, original hardwood floors, and unique features like ornate staircases. Building styles have changed over the decades. If you want character, you’ll need to buy an existing home.
An established home already has landscaping. Even the simplest landscaping is a savings for the buyer. The cost of seeding a new lawn can cost a small fortune. Hidden costs like landscaping make purchasing an existing home even more affordable.
With all of these savings it seems like the decision is obvious, but wait; there are some cons to purchasing an existing home.
It is hard to find a move-in ready existing home. Does the home need to be painted? Will you need new appliances? There are a lot of variables and the costs should be weighed before you make an offer. Remember, you can negotiate almost anything. Factor in your time and labor too: will you be making the improvements yourself or will you hire a professional? The honey-do list can get lengthy with an older home.
If you make an offer on an existing home, always include that you want a home inspection. A professional home inspector can discover hidden problems. The inspection report will let you know what lies ahead, and it can also be used to negotiate repairs or a reduction in the home’s price. Usually, the home buyer pays for the home inspection, but the investment is worth your peace of mind.
How To Decide: Weighing the Pros and Cons of Building and Buying
Ultimately, you have to decide what works best for your family. Every family is different. The decision can be stressful either way, but the best way to reduce this stress is to hire the best professionals you can find. Seek a reputable contractor and always ask for references. Ask friends and family for recommendations when choosing a real estate agent. Hiring a professional to be on your side is the first step toward finding your dream home! Doing the research in the beginning will make the rest of your journey easier.
After that, stay diligent and positive. There is an end in sight and when you get there, you’ll be living in your dream home! This overview of the pros and cons of building and buying will help you as you begin your journey.
Authored in Appalachia || Amy Morton