If you are ready to make an investment in a home, you could be trying to decide whether you will buy an existing house or use a custom builder. The choice can be a difficult one, especially for first-time homebuyers that don’t have a lot of experience with real estate investing.
The truth is that the choice between buying and building a home will come down to personal preference. There are clear advantages and disadvantages to both paths. Before you decide, it’s important to talk to a broker or a contractor to learn more details about each choice.
New construction homes are going up around the country, so finding a qualified contractor is easier than it would have been years ago. Let’s take a closer look at some of the important aspects of buying and building a home.
Buying a Home
More buyers choose to buy a home that already exists. However, this doesn’t mean that it is the right option for you. If you have a detailed wish list of must-have features in your new home, you may find it difficult to find the perfect home.
Pros of Buying an Existing House
- Depending on the closing date of a house, you could find a new home and be moved in less than two months. For anyone that is anxious to get settled due to a career move or because of an impending family extension, it is generally much faster to buy an existing home.
- Comparable by square footage, it is cheaper to buy an existing home than it is to build a custom home. Large construction projects can take a long time and often involve stretching an existing budget to the maximum.
- An existing home will already have grass, possible garden beds, and fencing in place. While you can always update the landscaping to suit your taste, you won’t have to spend money to start from scratch with new sod.
Cons of Buying an Existing House
- On average, homebuyers spend more than three months searching for their new home. The time expended can be frustrating and stressful.
- When putting an offer in on a potential home, you could run into competition. More than one buyer bidding on a home at the same time can result in paying a much larger closing price.
- Finding an existing home that has all of your desired features can be challenging.
- You are more likely to have to make compromises and give up some items on your wish list.
- Buying an existing home means that you will end up in a home with a history. Older homes can come with higher maintenance bills.
Building a Custom Home
Many homebuyers have a clear idea of what their perfect home will look like. For those that have their heart set on a specific location or a list of desired features, building can have its advantages.
Pros of Building a Custom Home
- You have the freedom to create a home that is perfect for you. Your custom home builder will work with you and their designers to create the perfect floor plan and details.
- Every aspect of a custom-built home is brand new. Your maintenance costs will be much lower for the first years of ownership.
- More custom homes are including eco-friendly features to reduce their carbon footprint. Recycled and sustainable materials can be used through the construction process.
Cons of Building a Home
- Qualifying for a mortgage to build a custom home can be more difficult to secure. Until your home is completed, there is no collateral value for the bank to lend against.
- On average, it takes nine months or more to complete a custom home build. During your build, you will need to keep your current mortgage so that you have a place to live.
When you are ready to invest in a home, there are endless decisions to be made. Consider some of the factors that we have shared to help you decide between building and buying your new home.