Buy or Build? New Construction Pros and Cons

Buying a home is typically the largest investment that most people experience in their lives. There's quite a bit that goes into the process, and sometimes it can seem overwhelming, especially if you're new to the process. On the bright side, it's an exciting new step forward in life, and the patience and effort is worth it when you find the home you love. So, if you're considering making this investment step, then it's time to start thinking about whether or not you want to buy an existing home, or build a new one.

Both buying and building have their advantages and disadvantages. Figuring out what's worth more in the end to you and your family is what will help you make that decision. Here's what you need to know about both choices.

Buying a Home

Streamlined Process

The the process of buying a home is typically a streamlined one — you meet with a loan officer, find out how much home you're able to afford, get with a real estate agent, the agent finds homes in your budget, and you shop around until you find one you love. Sounds easy enough, right? But even in this process, there could be some bumps in the road. For example, you find a home you love and make an offer, but get push back from the seller asking for a higher offer. It's possible to lose your chance of purchasing a home to someone who provides the seller a better offer — leaving you to starting over in the house hunting process. But, everything happens for a reason, so don't lose hope.

Convenience

It's nice to be able to move in to a home that's move-in ready. You make the offer, you close on your new home, and you move in. You're able to conveniently start your life right away and settle down, which is ultimately the point of buying a home, isn't it? Settling down?

Buying an existing home typically gives you the ultimate convenience of being able to settle down faster than if you were to build a new home.

At the same time, most homes need an upgrade anyway. People have been living there, so they have their home styled the way they wanted it to be — with their paint colors, carpet or wooden floors, etc. It's common to have to make some minor changes to the home before moving in, which takes time and more money. You risk not getting exactly what you want when you buy an existing house. Sometimes you know that going in, other times you only figure that out after living there a year — a cost to consider nonetheless.

Cost

Speaking of costs, buying an existing home is often a more cost efficient way to get a house in the location you prefer to live. Now, although this is true for most cases, it's not for all cases. Prices of homes obviously fluctuate with the real estate market, so it depends on when you're going through your home buying process.

Aside from the actual cost of buying the home itself, there are some cost factors that aren't thought about right away. For example, if you're buying a home in an existing neighborhood, chances are there's mature landscaping, so that would be one less thing to worry about upon moving in. Sometimes the changes you want to make to a home are bigger than you originally thought. For example, the whole house is perfect, but the kitchen is not what you would have picked or it's too small and you want to make upgrades. Remodeling and home improvements, especially ones done to an entire room, can be expensive and a cost to consider when buying an existing house. Or, because it's an older home, there are repairs that need to be done sooner than you originally planned for. Plus, you may also encounter HOA fees to live in a particular neighborhood, but that's a cost that can potentially be expected even when you build a home. As mentioned previously, with buying an existing house, you risk not getting exactly what you want.

Building a home

You get what you want

This reason alone, is often enough for people to go the route of building a home versus buying an existing one. Not only do you pick your land, but you pick your builder, you pick the style of your home and layout, etc. It's made for you and your family, so chances are, it's a home you can truly grow up in as a family. On the flip side, getting what you want can be costly and time consuming. If you can afford it, which can be clarified by your loan officer, and you have patience, then this is still a great option for you; but it's not for everyone. It typically costs more to build a house than to buy an existing one, and you don't always get the neighborhood you want. New construction is often done in expanding areas of a city — which could actually be beneficial because of the newer shopping areas often built near new construction.

Materials used

Modern day materials used are often better quality, better for the environment and your health, and chances are, will help your home last longer (not taking into consideration unexpected natural disasters.) And aside from the materials themselves, you also get modern features like high-speed internet, newer HVAC systems, and more. Inclement weather can impact deliveries of materials or production of these materials and can result in delayed building. With that said, plan an extra 2 - 3 months of building in your schedule just in case.

Re-sell value

Re-selling your newly built home in 15, 20, or 30 years will likely be easier than selling homes older than yours, especially with the current materials used and addition of modern features. The home value isn't just reliant upon your property either.

If your newly built home is in a new neighborhood, then the surrounding built homes will also assist in leveling your home value.

If there are newer, high-end shopping centers and grocery stores nearby, that could also impact your home value. Long-term goals are important to consider because at the end of the day, your home is in fact an investment. But if your goal is primarily revolving around the near future, then the cons mentioned before may outweigh the pros of re-sell value. One isn't necessarily better than the other. It entirely depends on your specific situation and place in life. For some, buying may be the better choice, while for others, the pros of having a home exactly to your specifications is enough of a reason to spend the time and money needed to get just that. It comes down to, what can you truly afford?