People in the market for a new home may already know whether they plan to buy or build a home. However, with either option, there are bound to be unexpected hiccups, especially in hot markets like the one we are currently experiencing. Here is more information about current real estate market trends. I know people who never considered building a home before, and are currently building because there weren't any houses on the market. I also know others who had their hearts set on building a new home, but in the end, settled on buying a house instead because of the location they wanted.
If you decide to buy an existing home, you might not get everything you wanted on your wish list. You might trade some of those items in order to be in a certain location, or move in a certain timeframe. However, if you know what you want and aren't having any luck finding it on the market, building a home is a great option. And, you can customize everything to your taste and your family needs.
Items to Consider When Buying or Building a Home
Wherever you might be in your home buying journey, I hope that this post will help you reflect on a few major points when deciding to buy or build a home. With either option, there are many variables to consider, as well as pros and cons to each. And, they both have their challenges. Read on to learn a few pros and cons and items to contemplate when deciding if you should buy or build a house.
Time is money, right? So you will need to determine what your timeline is for buying, moving, etc. Are you in a time crunch to get out of your current house? Are you relocating for a job? Do you need to be in and out of a house by a certain date? Then maybe building isn’t the best option right now. Building can take some time depending on the building company and the contractors’ schedules. Scheduling for things like electrical, plumbing, and pouring concrete, to name a few, can hold up construction during busy seasons. There can also be more red tape involved when it comes to inspections, permits and approvals. Typically, buying an already existing home is quicker. However, it greatly depends on your location, must-have list, budget, and current market trends. Read more here about things to look for when house hunting.
Today’s current market is a seller’s market. In a previous blog post, we offered a few tips on buying a home in a sellers market. It can be difficult, as houses move quick. They are often gone before you have time to even consider it as an option. In this situation, building a home may be a quicker option, as you typically aren’t competing with tons of other buyers. Usually, you can find a new lot or piece of land quickly and close on it. Then you just have to wait for the construction to be complete. The timeline for new construction does vary, so it is best to talk with your agent and builder and make sure you are all on the same page. Read more here for additional information on buying or building a home.
If you have a set neighborhood or desired school district, that can greatly limit you in both buying and building a home. You will want to do some research on your ideal area to see if there are neighborhoods with new construction, land for sale, or homes for sale within your budget. This is where an experienced agent comes in handy. They can help you with this process and discuss the best options for that area. In addition, if you have children, Schooldigger.com and greatschools.org are two great resources to help determine the best school districts in your desired area. Location, budget, and availability are the three main items that will ultimately dictate your decision.
Which leads me to point three ...
3. Budget & Contingency Planning
When deciding whether you should buy or build a home, always factor in the “unknowns”, and have a contingency or emergency fund. Most people do this automatically when they start house hunting. Things like HOA, the cost of living, real estate taxes and insurance, the condition and future work required of the new home, and your wish list are all taken into consideration.
However, when building a home, there are probably a lot more items to consider and decisions to make than you realize. Obviously, the ability to fully customize a home to your taste and needs is a huge plus! When building and customizing a home, the sky's the limit! Well, actually your budget is the limit! It is exciting to dream up your future space. The downside is that it can be overwhelming to make all the decisions. You can also very easily get carried away picking out new furnishings, finishes, upgrades, and everything in between. In the process of making all these decisions you don’t realize how much the price has increased. It can be quite a shock to see the numbers and how much your owner’s retreat, or modern chef’s kitchen with a large island actually costs.
We are all for you building your dream home and getting those little things you've always wanted, like a walk-in pantry or under cabinet lighting, but you want to make sure you aren’t going overboard. Sometimes you need to rein it in a little. One thing is certain for both buying and building a home, you don’t want to be house poor! Dave Ramsey makes a few great points about the pros + cons of buying vs. building a home here, as well as the cost breakdown of building a home here.
On the flip side, there are a few less obvious items to consider if you decide to buy an existing home. Mainly, the age of the home and future renovation/update costs. You may be able to get into your new home quickly and within budget, but you must factor in what has already been updated, and what will need attention in the near future. You want to be sure you won't drain your bank account shortly after moving in.
Don't be afraid to ask questions!
It is wise to have a standard list of questions that you ask your agent about each home you view. For instance: what is the age of the roof? Does it have a well and/or septic system? If so, when was it last serviced or replaced? How old is the heating and cooling system? These are a few main questions that can save you a lot of money in the event one these items need replaced shortly after moving. There are many more great questions you can ask, click here and here to read more.
I think the final point to take into account is your personality. Believe it or not, your personality comes into play when making this decision. Do you prefer a home with character and charm, or do you lean towards that fresh, new, and modern style?
If you are someone who walks downtown in a historical area and swoons over the charm of the old buildings and homes, then building a new home might not be for you. You thrive on the story older homes tell, and love preserving some of the original character of the home. A new, modern build might not feel like “home” to you. Sure you can absolutely make it your own and customize it, but you won’t have those original features and the history that goes with it.
But, if the thought of an older home makes you cringe just a bit, or you already know renovations are not for you, then maybe a new build is a better fit. Everyone has their own unique style and taste, which is what makes house hunting or building so exciting! It is a chance to take something and make it your own! This article had a few other great points about the advantages and disadvantages of old construction versus new.
Still Undecided on Whether You Should Buy or Build a Home?
Ultimately, this process can be stressful and overwhelming regardless of whether you decide to build or buy a home. Each option has their own risks and rewards. From personal experience, we feel that building a new home is more stressful, if we are being honest. BUT, it is more rewarding. We don’t mind the hard work that goes into building a home, or the work involved in a renovation. We enjoy the process and the end result, but we know it isn’t for everyone. You can read more about our home journey here.
A new home is an exciting new adventure. There is no easy, clear cut answer, but hopefully these points help you research and think about what is best for your situation, and what you really want out of your future home. To read more about the cost comparison of buying vs. building a home check out this article here.
Also be sure to look at our previous blog posts for further insight and tips on the home buying and building process.
Remember, progress > perfection.
Mason and Liz