Do I buy an existing home? Do I build a brand new home? When it’s time to make that investment these questions might be the first that come to mind before even getting pre-qualified for a loan. While the home buying process involves a number of important choices, one of the very first decisions buyers need to make is whether to shop for an existing home or build a new one. Each path has its advantages and disadvantages.
Buying an Existing Home
There are two primary advantages to buying an existing home: convenience and cost. Once you are pre-approved for a loan, you can shop around, pick out a home and make an offer. Even though the process involves a lot of steps- such as financing, viewing homes, making offers, home inspections, and closing, all things a qualified real estate agent can assist you with- the convenience of being able to move in right away is compelling enough for many people to choose an existing home. This may be the best choice for those on a tight schedule, such as those relocating for a job, or whose children will be starting a new school.
Another reason to consider an existing home is if you would like to be in a particular established neighborhood- near work, school, friends and/or family. If you are considering living close to town your best bet will be an existing home since most, if not all, of the land will already have been built upon.
The biggest disadvantages of buying an existing home may be that you won’t get exactly what you want. You may not be in love with the floor plan, number of bathrooms and bedrooms on the main floor. Most older floor plans may be functionally obsolete, and no longer meet the needs of most buyers. Unless you find an existing home that has exactly what you want and is in the perfect condition, you will have to spend additional money on remodeling, repairs, decorating and/or landscaping.
Building a New Home
The biggest advantage of building a new home is you are much more likely to get exactly what you want. A new home is more efficient which is good for the environment and your pocket book. A new home may also be better for you. A new home is less likely to have the health concerns or toxic materials of an older home. It can be built with certain materials that are better for the environment. Even though upfront costs of building a new home may be higher, it may be easier to recoup your investment. A newer home is typically more appealing than an older home to most people and you may make a significant profit when it comes time to sell. Building a house can lead to a level of satisfaction that you can’t achieve through buying an existing home. This is your creation that matches your style and personality that you created from scratch.
Building a new home does not offer the same convenience as buying an existing home as there are several more steps involved such as finding the land, hiring
Finding an existing home can cost up to $80,000 less than building a new home. That is if your existing home is perfect and doesn’t need any renovations or upgraded items. Many repair costs can drive up the cost of an existing home that may not have been factored in at the beginning of the process. With choosing to build a home, no renovation or hidden costs will come after the closing. The price can be driven up with the addition of added items not in the original contract.
The bottom line is you may go back and forth in trying to decide what the perfect fit is for you. In either case, working with an experienced professional can help ensure the process goes as smoothly as possible.