So you’ve decided to buy a home – congratulations! For many people, this is the biggest purchase they will make over the course of a lifetime. Because of this, however, there are some associated stresses due to what’s plausibly a long and difficult process. You may be wondering whether you should buy an already existing home, or build one yourself. Here are some pros and cons of each potential decision.
Pros of Building Your Own Home:
If you build your own home, you are in the unique position of being able to direct a vast array of choices. You can essentially get the house to be very close to, if not exactly, the way you want it. Your developer or builder will work with you, and you can direct him or her on things such as paint colors, wall placement, etc.
Most homebuyers prefer building a home or buying one that has just been built solely because they are the first ones to inhabit the space. Just as a car has a new car smell, a never-lived-in-before home will have a new home smell, free from cigarette smoke-infused walls, dents in the floor from where a piece of furniture fell, or other imperfections.
Newly built homes will have the types of floor plans and layouts that current homebuyers are looking for – whether it’s large master baths, kitchen islands with vast granite counter tops, or walk-in closets. They’ll also feature up-to-the-minute amenities such as heated bathroom floors, wiring for Internet, alarm systems, etc.
If you buy a home that is brand-new, there should be very little (if any) maintenance that you have to do for some time. New plumbing fixtures, heating, air conditioning, and appliances mean that it should be a few years (at the minimum) before you need to spend money on things homeowners are required to. New homes are also built to be more energy efficient. Heating and cooling costs should be lower due to well-sealed windows, water costs kept down by low-flow faucets, etc.
Pros of Building Your Own Home:
Talk to anyone that has built his or her own home and you’ll likely hear a scary story about unexpected delays and frustrations that have resulted. There are so many potential setbacks: postponed inspections, overly-optimistic general contractors, difficulty getting specific materials, it’s no wonder things can end up taking longer than expected. Even if a developer quotes a six to seven month timeframe, it’s best to add a few more months to that before you’re expecting to move in. You can avoid having to find (often expensive) temporary emergency housing if things get pushed back.
Building a home costs more upfront (sometimes up to 20%) and you’ll also frequently pay additional unforeseen expenses. Whether it’s because the features in the developer’s model are not actually ones that come with the basic model, or due to last-minute upgrades, it’s likely that you’ll end up paying more than was initially forecasted. You also have to factor in the time commitment on your end, which can be sizable depending on how involved you want to be in the process.
Being in a New Development
If you buy a newly built home you will often be in a fairly new development. This means associated homeowner fees or assessments, and sometimes construction noise from the building of other homes. You may deal with traffic sounds from a constant flood of prospective buyers. If you are one of the first to buy, it may be awhile before you have a good community of neighbors to socialize with and provide safety to your surroundings. You may also be quite a distance from conveniences such as shopping centers, grocery stores, schools, etc.
Construction Loans and Permits
There are a variety of loans and permits involved in building your own home. Sometimes builders will carry the construction loans needed for the building process, as well as understand the area’s permit requirements, but if not, it’s your responsibility as the homebuyer. Even if they do take care of these things, it’s a good idea to understand the basics so that you can make sure everything is done up to code. If you have any doubts about your expertise, or questions about specifics, hire an inspector to help you out.
If you’re trying to decide whether to buy an existing home, here are some of the associated pros and cons to consider.
Pros of Buying an Existing Home:
Cost and Convenience
Buying an existing home will generally be cheaper than building one. If you’re in a rush to move, due to a new job or kids starting classes, this option will also definitely be faster. Even though home buying requires numerous steps: associated costs, home viewings, the offer process, general inspections, and closing, you can do these things quickly depending on how much time you have to devote to the process and how picky you are. This can be sped up if you are working with a real estate agent that assists you in locating potential properties and then helping you with negotiations and paperwork. If an offer you make is accepted, you may even be able to move in the same month.
A newly built home will have a different aesthetic appeal and feel than an older home. This can be a big factor if you have design tastes that run towards vintage or classic. Some people find newer homes to be more sterile and less homey.
An Established Neighborhood
Moving into a neighborhood that is already well established can be great for getting to know your neighbors and forming a community. You might also have local shops and other conveniences that can be lacking in newer developments.
Cons of Buying an Existing Home:
Dated Floor Plans and Features
Older homes may have dated floor plans and other specs that aren’t exactly what you were looking for. They may require lots of work – depending on how old they are – just to make them move-in ready and safe to inhabit. On top of this, you may have a lot of other maintenance and renovation costs, depending on your needs and wants.
If you have weighed the associated pros and cons and decided to build your own home, here are some things to be aware of:
Research Your Builder
As with anyone else you’re doing business with, it’s important to make sure you’re working with a reputable builder. In this day and age it’s all too common to hear of builders who sign a contract, build a poorly constructed house and then disappear. Luckily it’s not too difficult to determine whether or not you’re working with someone responsible – you just have to do some research. People to contact include other owners who inhabit the prospective development, local real estate agents, county overseers or building department staff who do business alongside local developers, and the local Better Business Bureau (BBB). The ideal homebuilder will have a good reputation for constructing solid houses, and will also make himself or herself accountable and available should any unforeseen circumstances arise.
Remain Involved Throughout the Process
Though it may be tempting to sign the paperwork and step back, allowing someone else to guide and oversee the process, it’s crucial that you as the homeowner remain in touch and engaged. Hire someone (an inspector and/or a knowledgeable contractor) to come by at different points during the course of construction to inspect the quality of what’s being done. Standards should be easily determinable to the trained eye during a walk-through. You should also stop by regularly to check for any noticeable imperfections or other issues that come up. All systems, such as the electrical and plumbing, should be examined as they are finished. You want to avoid a situation where you move in and find out that there are problems that could have easily been prevented.
Maximize Your Return on Investment
It’s an all-too-common practice for developers to be more concerned with money than delivering the best product possible. Sometimes model features look great, but are actually not the ones that would be in the offered sale unit. Or the materials in the model are low quality, so you’re forced to spend more on substitutes of decent condition. Be careful of these scenarios and be sure to ask a lot of questions. Don’t be afraid to negotiate – ask for a refrigerator upgrade if you are getting the highest quality bathroom fixtures, or request the right to buy and install certain extras yourself. Get everything in writing, including promises made by your developer, and have a lawyer look it over before you sign. If you’ve done your research and have carefully thought things through, you’ll be enjoying your new home for years to come.