The decision to build a home versus buying an existing one has serious implications. The pros and cons of both options have to be carefully considered before making a choice.
In today’s housing market, it can be difficult to find a home that suits your needs at the right price. This may lead some buyers to consider building their own home.
Customization
The biggest advantage of building a home is that it allows you to customize the layout and features to match your lifestyle. If you want a first-floor master bedroom or an open-concept kitchen, for example, you can make those requests to the builder.
Similarly, if you have special needs such as an in-law suite or accessibility features, you can incorporate those into the design. This may not be possible with an existing home, and can be particularly useful if you plan to run a business from your house or have other lifestyle considerations.
But the ability to customize comes with a downside: Choosing every detail, from the location to the type of flooring, means that you’ll have to spend more time and money on the project. Additionally, it’s common for construction costs to exceed estimates, and delays or unexpected issues can add up as well. This can make the process long and stressful, particularly if you have other commitments.
In addition, there are a variety of decisions to be made throughout the process, and it’s essential to hire professional builders you can trust. Conducting thorough research, reading reviews and verifying licenses is critical before making any hiring decisions.
Another disadvantage is that it takes more time to build a home, and you’ll have to find a place to live while the construction is underway. This can be particularly challenging if you’re buying in a hot market, where the inventory of homes is low and buyers are competing for every available property.
The good news is that new homes are typically more energy-efficient and have updated appliances, systems and building materials compared to older properties. This can reduce your utility and maintenance costs in the future. In fact, a member of our Baby Steps Millionaires Facebook community recently shared that she saved more than $30,000 on her monthly utilities by building her own home rather than purchasing an existing property in a similar area. Those savings can go a long way toward paying off your mortgage faster, or saving you for other expenses.
No Competition
Buying a home is an important milestone for many people, and finding a dream home that fits their lifestyle can be difficult. There are advantages and disadvantages to both options, but weighing these pros and cons can help you make the right decision for your family.
Purchasing an existing home can be a more convenient option if you’re relocating, in a time crunch or simply prefer the familiarity of an established neighborhood. However, the downside of this is that you may not get everything on your wish list and will likely need to compromise on a few things.
The other major disadvantage of purchasing an existing home is that it may be older and require more maintenance. This can include costs for repairs and replacements of appliances, plumbing and electrical systems. In addition, an older home could also be more susceptible to environmental hazards and pollutants.
When you build a home, you can avoid these issues and enjoy the peace of mind that comes with knowing your home is new and won’t have any pre-existing problems. Plus, a new home is typically more energy-efficient than an existing home, which can help you save money on your utility bills.
One big drawback to building a home is that it’s often more expensive than buying an existing home. On average, it costs about 20 percent more to build a home than buy an existing one, depending on location and other factors. This increase in price can be a challenge for first-time homeowners who are on a tight budget.
Timely Completion
Like anything custom-made, new homes tend to cost more than store-bought or mass produced products. That means you’re going to spend more upfront if you build rather than buy an existing home, but there are a few things that may offset this cost.
First, the costs of land can vary based on location. So if you find the perfect plot of land to build on and the right builders, it can actually be less expensive to build than buying an existing house. The same goes for materials and labor. This is why it’s important to have a good building team on your side to help you keep the budget under control.
Secondly, there’s the time factor. It takes about seven months to build a home, and you’ll have to find somewhere else to live during this period. That’s a lot of stress and extra expense for something that could be avoided if you simply bought an existing home.
Finally, there’s the maintenance costs of a new home that you don’t have with an existing one. Oftentimes, new homes are built with the latest energy-efficient technology and systems, which can lower your monthly bills. This isn’t always the case, but it’s a great way to start off your homeownership with low expenses.
Owning a home can give you a sense of stability and security, as well as pride in owning a property. It’s also a good investment, with the potential to grow your wealth as real estate values increase.
The biggest downside to owning a home is that it’s a huge commitment, especially if you plan on selling in the future. It’s important to think carefully about whether owning a home is the best fit for your lifestyle, and work with an agent that the Ramsey Team recommends to help you make an informed decision.
When considering whether to build or buy, the most important question is why you’re making this decision. Is it because you want to start a family, move into a better school district or get more space for your remote job? Once you’ve answered this, the rest of the decision should be pretty clear.
Peace of Mind
Building a home can seem like a daunting task for new buyers. There’s so much to consider, from picking out the perfect location and ensuring that your dream home can be constructed on a budget to selecting the right appliances and fixtures.
The process is usually lengthy and tedious, especially when labor shortages cause delays and cost overruns. This may mean that the house you thought you could afford is no longer within your budget, or that you’ll have to make sacrifices in order to stay within your financial comfort zone.
On the other hand, buying an existing home is a less complicated and time-consuming process. Depending on your preferences, you can purchase a property in the neighborhood of your choice and move in immediately after closing, without having to wait for construction to be completed. This can be ideal if you are on a tight deadline and need to move into your new home quickly.
However, buying an existing home can also come with extra expenses that you may not be aware of when looking at the listing details. For example, if the home has been recently updated with modern amenities that aren’t included in the original price, you might need to spend more than you initially planned on in order to enjoy those features. Also, remember that mortgage payments typically include a percentage of the home’s value in addition to a down payment and property taxes. Make sure you stick to a mortgage payment that doesn’t exceed 25% of your take-home pay.
Both options have their pros and cons, so it’s important to weigh these carefully before deciding on whether to build or buy a home. Weighing these factors can help you decide what’s best for your unique situation and goals.
No matter what your decision is, remember that both options offer the possibility of a beautiful, custom-designed home in your preferred location and style. The key is to choose a property that fits your family’s needs, budget and timeline, and that you will be happy with for years to come.