Buy or Build? New Construction Pros and Cons

Buying a home is one of, if not the, largest investments that most people experience in their lives. Quite a bit goes into the homebuying process, and sometimes it can seem overwhelming.

On the bright side, it's an exciting new step forward in life, and the patience and effort are worth it when you find the home you love. So, if you're considering making the big investment, it's time to start thinking about whether 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 an informed and calculated decision. Here's what you need to know about both choices:

Should I Buy an Existing Home?

When it comes to purchasing a home, deciding whether to buy an existing property is a crucial first step. Let's explore the benefits and considerations to help you make the best choice for your situation.

Streamlined Process

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 there could always be some unforeseen bumps in the road. For example, you find a home you love and make an offer but get pushback from the seller asking for a higher offer. It's possible to lose your chance of purchasing a home to someone who gives the seller a better offer — leaving you to start 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 right into a move-in-ready home. After all, it’s in the name!

You make the offer, close on your new home, and move in. You can start your life immediately and settle down, which is ultimately the point of buying a home. Settling down for the foreseeable future?

At the same time, most homes need an upgrade anyway. People have been living there, so their homes are styled how they wanted them to be — with their paint colors, carpet or wooden floors, etc. Minor changes to the home before moving in are expected, which takes time and more money. You risk not getting precisely 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 in. Although this is true in most cases, it's not true in all cases. Home prices obviously fluctuate with the real estate market, so it depends on when you're going through your homebuying process.

Aside from the actual cost of buying the home, some cost factors take time to consider.

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. And sometimes, the changes you want to make to a home are bigger than you originally thought. Let’s say the whole house is perfect, but the kitchen is different from 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, repairs need to be done sooner than you originally planned.

You may also encounter HOA fees to live in a particular neighborhood, but that's a cost that can potentially come even when you build a home. As mentioned, when buying an existing house, you risk not getting exactly what you want.

Or Should I Build My Home?

Building a home from the ground up offers a unique opportunity to create your dream space. Here’s what you need to know to decide if starting from scratch is the right path for you.

Get Exactly What You Want

This reason alone is often enough for people to build a home versus buying an existing one. Not only do you pick your land, your builder, the style of your home and layout, etc., but it's made for you and you alone. So, chances are, it's a home you can truly grow up in as a family.

Conversely, getting what you want can take time and effort. If you can afford it, which can be clarified by your loan officer, and you have patience, then this is still an excellent option for you, but it's only for some. It typically costs more to build a house than to buy an existing one, and you sometimes need to get the neighborhood you want. New construction is often completed in a city's expanding areas—which could be beneficial because the newer shopping areas are often built near new construction.

Newer Materials

Modern-day materials are often better quality, better for the environment and your health, and will help your home last longer (not considering unexpected natural disasters). Aside from the materials, you also get modern features like high-speed internet, newer HVAC systems, and more. Inclement weather can impact materials delivery or production, delaying the building schedule. With that said, just in case, plan an extra 2-3 months of building in your schedule.

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 the addition of modern features. Home value isn't just reliant upon your property, either.

If there are newer, high-end shopping centers and grocery stores nearby, that could also impact your home’s value.

Decision Time…

Long-term goals are essential to consider because your home is, in fact, an investment. But if your goal primarily revolves around the near future, the cons mentioned above 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 you can truly afford.