When you imagined buying a house, it seemed easy. Everything would fall into place. The price would be right, the location would be ideal, the layout and room size would be perfect, all your preferred amenities would be there waiting for you, and you’d even like the decor. Unfortunately, that hasn’t happened. You’ve been scouring the area, comparing various properties to your own list of wants and needs, but you haven’t found a place that feels like home. Could it be that your perfect home doesn’t exist yet? Now, you’re left asking a new question: Should I build or buy a house?
Deciding Whether to Build or Buy a House
How do you know whether it’s best to build or buy a house? You’ll need to consider the pros and cons of both approaches. Then, you can determine which one best fits your unique situation.
The Pros and Cons of Building a House
As Dave Ramsey points out, building a home certainly offers some appealing benefits. You’ll get to make the design decisions and customize the house to suit your lifestyle. New homes also generally come with the latest features and energy-efficient materials and systems. Plus, everything is brand-new and is likely to be under warranty. Unless disaster strikes, you shouldn’t have to worry about major repairs or replacements for a while.
However, there are some significant downsides to building:
- With so many decisions to make, home building is a time-consuming and stressful process.
- Costs are difficult to predict or negotiate, and they can quickly creep higher than you expected.
- Financing can be tricky. Construction loans are available, but they typically require more paperwork than traditional mortgages.
- You’ll have to wait until construction is complete (on average this takes around 7 months) to take possession of your new home.
- If you’re building a home in a new community, you’ll probably have to deal with traffic and construction for some time.
The Pros and Cons of Buying a House
Buying a home has its own set of positives and negatives. Where does price fall? As Realtor.com explains, buying a home tends to be cheaper than building a new one, and you’ll likely have more room to negotiate on price. Buying also tends to be a faster option because you can normally move in immediately after closing. In addition, it’s easier to get a sense of the neighborhood culture with existing homes in established communities. Finally, if your home doesn’t meet your goals, you can renovate (if your time and budget allow) to bring the home into line with your lifestyle and improve its functionality and efficiency.
The downsides of buying a home include the following:
- You will likely have to compromise more when buying a home, as it’s rare to find a home that satisfies every item on your wish list. You may not fall in love with the home’s floor plan, flooring, finishes, or appliances. While you can remodel the home, this process can be costly and time-consuming.
- It’s unlikely that an older home will be as energy-efficient as a new one.
- When you buy a home, you have to expect some surprises to pop up along the way. It’s hard to tell what the previous owners have done or not done. You are likely to run into maintenance issues sooner than someone who builds a brand-new house.
- Some older homes don’t quite meet the needs of modern homeowners and can be difficult to remodel. For example, a home may only have one bathroom or feature a small kitchen with no room for expansion.
Things to Think About
When it comes to deciding whether to build or buy a house, there are several major factors that you’ll want to think about:
- Finances: The Balance reports that building a new home typically costs between $149,000 and $436,000, depending on your project and your local market. In contrast, the median price for an existing home is around $260,500. With the rising costs of materials, the cost of buying land, and increasingly stringent building codes, building normally costs more upfront than buying does. If your budget is tight, you may get the best bang for your buck by buying an existing home.
- Timing: Are you in a hurry to move in? As Investopedia points out, if you opt for an existing house that’s move-in ready, you may be able to close and take possession in a month or so. In contrast, building a house generally adds several additional months to the timeline.
- Personal Preferences: Of course your personal preferences will also come into play. What are your priorities? Do you enjoy making decisions or does it stress you out? Do you prefer the convenience of buying an existing house? Are the possibilities for customization that come with building irresistible? Are you a concrete thinker who needs to know exactly what you’re getting and how much you’re spending to feel comfortable? Or, are you okay with the more abstract approach that’s required when you’re starting from scratch and building something totally new?
Whether you’re searching for a home loan to finance the purchase of an existing home, a construction loan to fund the building of a brand-new property, or a renovation loan that will allow you to buy and renovate a fixer-upper, trust PrimeLending of Springfield, Missouri, to help you find the best loan. Our dedicated loan officers make finding an excellent home loan simple. We’ll guide you through the entire process with expert insights and clear communication. Contact us today to learn more.