If you know it’s time to become a homeowner or move into your dream home, you have one major decision ahead of you. Should you build a home or buy an existing property?
Here The Architecture Designs explore some pros and cons of each, and the following are some things to weigh as you make the decision.
Is It Cheaper to Buy or Build?
Sometimes people think it seems cheaper to build their home, but in reality, the prices can be similar, or in some cases, building can be more expensive. Right now, building materials and labor are both very expensive, but so are existing homes, so you’re going to have to do the math on what you want to really figure out which is going to be cheaper for you in the area you live.
When you build a home, you still have to find a loan. It’s probably going to come with a higher interest rate than you would get from a conventional mortgage.
You’re also going to have to pay for permits, land, land clearing, and other things before you even get to the point of building the actual home.
While it may, depending on your situation, be cheaper to buy an existing home, there’s something else to think about—long-term costs. It’s more expensive to own an older home, even if it’s not that old. You have to think about maintenance, repairs, and many other expenses with older homes. A house built after 2010 has operating costs around 3% of the home’s value. If you bought an old home built before 1960, that goes up to 6%.
There are a lot more unexpected things you might have to contend with if you buy a home versus building new.
What Are the Pros and Cons of Building?
The biggest upside is that you truly get exactly what you want when you build. You don’t have to search and try to fit your wish list into what’s currently available, which is pretty limited right now anyway. If you’re aiming for your forever home rather than a starter home, building custom can be appealing.
When you build, you don’t have to go through the back-and-forth of competing offers and negotiations with the seller, which are difficult right now. Your home is move-in ready, and when it’s time to sell, a new home may have better resale value.
At the same time, there are cons.
One con is the potential you’ll over-customize your home, limiting its pool of potential buyers if you do decide to sell.
When you build, it will take longer for you to get into a new home. Right now, there are even longer timelines on building than typically. There are more decisions you’re going to have to make, and as a result, building can start to feel like a job in and of itself.
There may also be challenges with contractors and subcontractors, and there are often disputes that arise when you build a custom home.
Finally, no matter what your budget is going into the home building experience, you can go ahead and plan that you’re going to go over that. It’s essentially inevitable. Things will be more expensive than you planned for, there will be things you didn’t expect at all, materials can go up in price during the building process, and your contractor may make changes on you as well.
Even with an ironclad agreement with a contractor, there can be things beyond their control or anyone’s control that lead to rising costs.
What About the Pros and Cons of Buying a House?
When you buy a house, the most significant upside for many people is the fact that it’s a faster experience. You can potentially move in a matter of weeks versus months or more.
Depending on the situation, you may be able to negotiate a really good deal on a home.
You may have more options available to you if land is limited where you are, and you can always customize the home to be what you want over time rather than putting all of your time and money into building a house.
One of the major cons of buying a house right now is a tremendous amount of competition among buyers, and it’s a seller’s market. You’re also going to have to compromise. That’s the reality, and it’s pretty unlikely you’ll find every single thing on your wish list.
The option that’s right for you is ultimately about your budget and timeline, as well as your priorities.