Article

To Build or To Buy: Which is Right for You?

Posted by Jessica Akright on Jan 19, 2017 15:00:00 PM

Topic: ALL

Newly finished home

There’s no getting around it. Building your dream home instead of buying one is not for the faint of heart! It may cost more and take longer to complete. And that’s just for starters. But unlike buying an existing property, everything is new and you’ll be moving into a house designed and built to your specifications.

So how do you decide which option is best for you? We’ve compiled a list of advantages and disadvantages when building new to help you get started.

PRO: You get what you pay for. From that extra bedroom, to the awesome kitchen and the 3-car garage, your home can be built to your specifications and with every amenity you’ve ever dreamed of.
CON: Building new is likely to cost more. Building supplies and labor increase every year, and you’ll also be paying for all the ‘start-up’ costs such as utility hook-ups, landscaping, paved driveway, and more. In fact, even the mailbox is something you’ll have to buy and install. Unlike buying an existing home with a fixed price, there are likely to be unexpected costs to build that may require financial resources beyond your original construction loan.

PRO: Established guidelines of homeowners associations ensure quality continuity in a newer subdivision that helps maintain and even improve home values there.
CON: Unlike existing homes in neighborhoods without a homeowner’s group, you may have to abide by the rules and guidelines of the association in a newer subdivision, including certain building features (multi-pane windows, specific building materials) and paying assessments for maintenance of common areas.

PRO: If you’ve had your eye on a particular community or neighborhood with available lots but no existing homes for sale, building on a lot there will get you right where you want to be.
CON: Lots can be costly, particularly in desirable new subdivisions. And your costs will include any lot prep required, from bringing in or removing dirt, to blasting out rocks or removing trees. You’ll also have to pay for hookups to city utilities or for a septic system and well.

PRO: Everything will be and look brand new. Cupboards, doors and woodwork with no nicks or scuffs, freshly painted walls with no dents or marks, gleaming floors showing no wear, and possibly even new appliances.
CON: Again, ‘new’ costs money…unlike buying an existing home that can be improved less expensively with a few gallons of paint, replaced fixtures or refinished flooring.

PRO: You get the floorplan you want, unlike buying an existing home with traffic patterns that are not ideal or rooms that may be on the small side.
CON: The more extensive your overall footprint to accommodate your desired floorplan, the more your home will cost. A bigger foundation for a single-story home adds to your cost, while a two-story home has a smaller footprint and smaller foundation.

PRO: You won’t have to spend weeks or even months looking at existing homes with your realtor. Instead you can peruse home plans and those on builders’ websites from the comfort of your favorite chair.
CON: It will take longer before you can move in. Figure six to 10 months to complete a new home, unlike buying an existing home that may allow you to move in only a month or two after your offer is accepted.

PRO: You can include the latest energy-efficient features in your home – from insulation to windows and doors. The newest smart-home features can be part of your building plan, from security systems to lights and locks that operate remotely from your smartphone.
CON: The more features you add, the more your costs go up, the higher mortgage you may need and the higher monthly payment you’ll be facing.

PRO: All of the mechanicals (furnace, water heater, water softener, air conditioner) and appliances will be brand new, eliminating the problems that can appear unexpectedly after buying an existing home.
CON: Not every new product is trouble-free. You may have to spend time getting your builder to remedy every missing or problem item on your final punch list or dealing with subcontractors and retailers when mechanicals or appliances fail to operate correctly.

PRO: If you know exactly what you want, and are adept at sketching out floor plans and other aspects of your dream house, you should lean more towards building. Additionally, well-designed newer homes are more appealing and tend improve your return-on-investment when you’re ready to sell.
CON: Finding the right lot, the right plan and the right builder takes time. And, in the end, you have to envision yourself in the floorplan you selected on paper. You don’t get to walk through and see if you like it unless your builder has existing models you can check out.

PRO: The more involved you can be, the more cost-effective building becomes. And if you’re willing to apply a little elbow grease by doing some things yourself – painting or landscaping, for instance – you can save some money off the overall cost.
CON: You give up some control when building new. You have to rely on and trust the builder or general contractor and the people he hires – and be prepared to accept his/her building schedule and any possible delays.

PRO: You can design and develop your own landscaping plan – from patios and gardens to flowerbeds and trees.
CON: The cost for designing a landscaping plan, planting more mature trees, and bringing in additional soil, decorative rocks or fencing can add considerably to the cost of completing the home you just built.

PRO: If you elect to buy a new home that is already finished and part of a builders’ existing inventory, you may get the best of both worlds: a totally new house and a specific closing date when you can move in. You’ll avoid almost all of the headaches that often occur in the building process.
CON: You won’t get some of the custom features and amenities that you might have added to your plans if building your own home, but perhaps some can be added further down the road.

In the end, deciding between buying an existing home or building a new one is a personal decision. Take your time to consider all of your options and prioritize what is most important to you so you can make an informed choice.

Download our comprehensive financing and building guide full of tips and information to help you get started.