Is It Better to Build or Buy a New Home?
One of the first decisions that every homebuyer must make when they begin to search for a new home is whether to build a new home or buy existing. Each has its own merits and is preferable in certain situations, so there’s no one answer to this question. If you’re searching for a new home, here’s why you may choose a new home purchase of an existing home or elect to build a new home from the ground-up.
Budget Considerations Favor Building
Is it cheaper to build or buy a home? While some prospective homebuyers have a misconception that building a home is expensive, the monetary figures actually favor building a new home over purchasing a resale home. Some things to consider when purchasing your home:
With regard to initial expenses, the difference between buying a resale home and building a new one will come down to how personalized you want your home to be. If you are comfortable buying a resale home “as-is” and not making any improvements, then the basic cost per square foot can be cheaper when buying a resale home rather than building a new home.
However, if you want to have your finishes match your personal style and really reflect your personality, then you are likely better off working with a home builder to pick the customizations that you want, rather than having to pay for expensive renovations.
Additionally, when purchasing a resale home, there may be costs associated with repairs that are needed after the initial home inspection to bring the home up to current standards, which is never a consideration when working with an established custom-home builder.
Ongoing expenses also heavily favor building a new home over buying a resale home, and this is an especially important consideration to take into account because it’s not a one-time cost.
Everything in a resale home, from the major systems to structural necessities, is older and more prone to have issues. This increases general maintenance costs, and it can lead to some substantial unexpected expenses. Replacing a roof or air conditioning system for example, can be ten to twenty thousand dollars.
In contrast, a newly built home comes with brand-new systems and structural items — and many of the major items in the home will come with warranties. Repairs should be unlikely in a newly built home. And, replacement costs might even be covered by a manufacturer’s warranty if the furnace does go out for some unexpected reason.
The difference between a resale home and a newly built home’s maintenance costs will be greater if the existing home is particularly old. Even a resale home that’s only a few years old, however, will still be more prone to issues than one that’s built brand-new.
Both purchasing a resale home or building a new home can have pitfalls when it comes to financing. In either case, you will likely need to make a down payment, and your monthly payment will be dependent on how much you can afford to put down and your creditworthiness.
When you are working with an established builder, they have an incentive to help you get the right financing to ensure that the transaction is as smooth as possible and affordable for the buyer, whereas a seller of a resale home has little incentive to provide any assistance with your financing.
Timeframe of Purchase Favors Buying
As long as the homebuying process might seem when you’re in the midst of it, purchasing a resale home is almost always faster than building a home unless you are lucky enough to find an inventory home that suits your needs.
There are several steps that precede between making an initial offer on a resale home and closing on a home. In situations where an unforeseen issue with a home inspection or appraisal does arise, the buyer must negotiate with the seller to resolve the issue.
When building a new home, there are many more steps in the process. A homebuilder can estimate how long a house will take to construct, but everything from design changes to inclement weather could potentially cause a delay.
The additional time that building a new home takes, however, isn’t a significant issue. Everyone would certainly like to get into their house as quickly as possible, but most everyone recognizes that waiting a little bit longer to get into a better home is worthwhile. A few additional months is a small price to pay for many years in a nicer place, after all.
Customization Options Favor Building
When it comes to customization, building new has a distinct and major advantage over buying a resale home.
If you build a new home from the ground-up, you can choose every aspect of the house from its floor plan and features to its appliances and paint colors. Home builders offer a wide variety of customizations that a buyer can choose between to personalize their new home to match their needs and personality. These upgrades can all be rolled into your mortgage and do not add additional out-of-pocket costs.
Should you purchase a resale home, the available customization options will be much more limited and they’ll all add to the cost of acquiring the home. Changing something as small as the color of a wall or finish on a stove will increase your out-of-pocket expenses since everything is already done, and major remodels or additions will add significantly to your costs. Moreover, some items simply won’t be able to be changed because everything is already done.
For many people, the ability to fully tailor a home to their liking is the most important reason to build a new home.
Talk with Cachet Homes About Building Your New Home
If building a new home sounds like an option that you’d like to explore, contact us at Cachet Homes to speak with an experienced, qualified sales associate. Our representatives would be happy to explain the building process and answer all of your questions, so you can make an informed decision about whether to build your next home.