It’s exciting for first-time home buyers to start the process buying a home. As you start to look at your options, you may wonder if you should buy or build your first home.
Here are some pros and cons of building a home and buying a pre-existing home. Hopefully, this will give you some insight on which option is better for you and your home buying needs.
Building a Home
You might be amazed at what you can afford if you decide to build your own home.
Keep in mind the average new construction home is around $289,000. The equivalent price per square foot is $103.
Depending on the features you want in your home, the price can easily rise above that number. However, customization of your home is virtually unlimited and you won’t need any big repairs for a while.
Pros of Building a Home
No big repairs
The great advantage of building your home from scratch is that you won’t have to worry about any big repairs, such as a broken A/C or wiring and plumbing.
It’s almost always cheaper with a newly built property because all the materials are as up to date as possible.
If your air conditioning unit is new, you’ll probably end up saving a couple hundred bucks.
If you purchase an existing home, you can expect to pay between $3,692 and $7,134 for a new air conditioning unit, according to HomeAdvisor.
Customization
If you build, you will have a full control over the features you want for your home.
Everything is what you want from the start, so you won’t have to spend additional funds redoing the home after you purchase it.
Everything you can dream of (and afford) can become a reality!
Cons of Building a Home
Long Wait Time
Your home won’t be move-in ready right away. It can take anywhere from four to six months to build a home.
That’s a long time to wait, and things can change while you are waiting to move. So, if you need to move ASAP, it may be better to look for a pre-existing home.
Limitations & Expense
Customization options for a new home build is endless, but only if you can afford it. Your funds determine what you can build, which may reduce options for the style of your home.
Everything you want can add up quickly, especially if you plan to use premier materials or if you want a high level of customization.
Loan approval can be tough
Although it’s not particularly easy to get a loan for a pre-existing home, it’s easier than applying for a construction loan.
It’s a higher risk on the lender. Pre-existing homes have an established asset, compared to unknown risks when building a new home.
Buying a Home
There are many reasons why buying a pre-existing home is a first choice among home buyers.
It’s definitely less work than building a home from scratch. Home buyers typically worry about buying a home with less than stellar features.
But, there are some great advantages as well. Buying a home is usually move in ready and comes with final finishing touches, so you won’t have to stress about upgrading anytime soon.
According to Zillow, the current median home value for pre-existing homes in the United States is $226,700.
Pros of Buying a Pre-existing Home
Move-in Ready
If you buy a pre-existing home, you will be able to move into your new home within 30 days. That’s a lot faster than six months!
Now you don’t have to be concerned with a long waiting period or temporary housing.
If you don’t have alternative living arrangements that are flexible, moving in faster is a nice option when you purchase something ready to go.
You are familiar with the neighborhood
If you’re buying a home in a pre-existing neighborhood, then you already know what to expect. You know the amenities in the area, crime rate, schools, the closest transportation and other details.
Upgrading can be a gradual process
With a pre-existing home, you can take your time making upgrades, allowing you to better budget for the expenses.
Cons of Buying a Pre-existing Home
Higher upgrade costs
If you buy a home with older windows and appliances, you may notice your electric bills are quite expensive.
As you upgrade these items, you will be able to get that price point down, but unless you can do it all at once, it’s going to take time and money to replace those appliances.
Higher home insurance
Compared to a new home, your home insurance costs will be higher with a pre-owned home. New homes come with features that are new and up to date, unlike some pre-existing homes.
Decorating costs
You may have to invest time and money to bring the home up to date. Maybe the wallpaper is old, or the kitchen needs a new paint job.
The typical costs for a home repainting project is between $938 and $2,442, according to HomeAdvisor.
Ken Venick
Phone: 443-471-4310
kvenick@equitymortgagelending.com