Owning a home is one of the things many people aspire to cross off their bucket list. But when that time comes, they find themselves in the valley of choice between buying and building. In times of home price inflation, many people are considering building their own house from scratch vs buying one.
Building a house or buying a dream home can both be exhausting and overwhelming. Therefore, hiring the services of a realtor agency will ensure that you get what you’re looking for. Such a company may even have what you want in its database. But before that, you need to weigh your options and find whether it is cheaper to build a house or buy one, and which one you want.
If you compare average build prices to average purchase costs, building your own home is generally expensive. However, there are numerous variables affecting these costs that can vary from case to case.
With many factors to consider, you must study the pros and cons of both before you decide which one would fit favorably into your budget. We’ve outlined the main points to help you narrow down your preferences for you to make an informed decision on whether to buy or build.
Building a New Home
Table of Contents
Although it doesn’t offer the same convenience as buying an existing house, building your own home allows you complete liberty to experiment and get exactly what you want. You have to choose every element of the new edifice, from finding a suitable plot and architect to customizing the interiors to your style and budget. If you find a good and reputable builder, you can minimize the risk of going over the budget or the expected time frame of the home construction.
You do, however, need to worry about complying with building codes, and getting access to facilities such as municipal water and sewage. These can take more time than expected. Nonetheless, many people choose to build their own place because it allows freedom to get the house of their dreams exactly as they want.
Pros of Building
There are other benefits to building homes such as the ability to make your home more energy efficient with new energy codes and standards for heating, ventilation, and cooling (HVAC systems), insulation, and air filtration. This can help the environment and save you money on your energy bills.
More often than not, the interior and structural features just don’t suit your lifestyle when you rent or buy a place. Well, the biggest advantage of building a home is that you get exactly what you want in your house. This is because you have complete control over finishes, floor plan, layouts, and the landscape. It’s more like having a blank canvas on which you can paint anything you wish. Building a home will enable you to incorporate your tastes and preferences.
No Bidding Wars
Unlike buying a house, where you have to compete with other house hunters to get the one you like, building a home is different. There are no bidding wars, no anxiety about whether you will get it or not. Once you acquire a plot, you can do everything at your own pace without competition. You can spend as little or as much money as your finances allow you to from the beginning to the completion of the project. There are no competitors to rile you up to spend more than you can.
A newly constructed house has less maintenance because everything is new. Moreover, new homes come with a builders’ warranty, and new appliances also come with insurance coverage. You’re also less likely to have surprise HVAC breakdowns, leaky roofs, or clogged drains. It will require fewer seasonal repairs, hence, saving you both money and time.
In a newly built home, you don’t have to worry about any health issues such as asbestos or lead paint. A brand-new home will not have any pests, mold, water damage, or any problems that frequently occur in an existing home. It will also have an emotional connection as you have created a space from scratch that complements your style and personality.
When you are building your home, you can incorporate numerous energy-efficient features to make it eco-friendly. This works favorably for eco-conscious homeowners, as they can make choices throughout the building process to focus on green architecture and sustainability. Include sustainable materials, thermal insulation, smart systems, high-performance appliances, and bioclimatic design to name a few.
Cons of Building
With advantages, there are a few disadvantages of building a home from scratch as well. You have to be mindful of construction costs, hidden costs, delays, and so on. Before you commit to building, read about the cons.
Costly Building Process
Brand new things always come with a higher price tag. Building a house is costly, especially if you’re relying on funding from financial institutions. For instance, if you start borrowing from the onset to purchase land, you may pay a higher down payment. The interest rates may also be higher to cover the lender’s risk. Then you’ll need another loan for construction. And finally, you may need to take out a mortgage when the building is complete, using the house as the collateral.
Hidden Costs and Unforeseen Delays
Even if you have upfront building cost estimates before construction, it isn’t unusual to have unexpected expenses coming up during the project. This can be due to a spike in material prices, labor shortages, or bad weather. Unexpected delays may also happen amid situations like the COVID-19 pandemic that caught people off guard. Such situations will affect supply chains and cause cost overruns.
More Waiting Time and Stress
Unlike buying a house where you move in once you close the deal, building it will take longer. A lot of stress will also be involved in ensuring that all the details are incorporated into the structure while staying within your budget. This takes effort and time. It’s even more difficult if you have to deal with your work and family while trying to focus on the construction.
Buying an Existing Home
Convenience and cost are the two major advantages of buying an existing home. You can shop around, pick out a home you like, and make a bid once you are pre-approved by your creditor. A qualified real estate agent can simplify the procedure by helping you find suitable properties, managing through negotiations, and supporting you with the paperwork.
After the acceptance of your offer, you can close the deal and move in within a suitable timeframe. There are several steps to follow such as financing, home viewing, offer making, home inspections, and closing the deal before moving in. The convenience of being able to move in right away is why many people opt for an existing home over a build. However, you should weigh the pros and cons of buying an existing home.
Pros of Buying
Besides the ability to move in right away (after following a few steps), buying a new home offers plenty of advantages. It is easier to find a home in your preferred location. Moreover, there is no pressure and the additional stress of overseeing construction. Read on to know the pros of buying a place.
Easier to Find Preferred Location
If you’re the type that’ll only settle in specific areas, you’re better off buying a house. This is because finding an existing home is easier than getting a plot to build on. You can look for homes in city centers if you want to live close to downtown. This way, you don’t have to stay away from hubs and business centers.
Buying a house will allow you more time to integrate your ideas into your home. You’ll be able to make the necessary adjustments when you’ve already moved in. You’ll work within your schedule and budget as you slowly move toward your goals. It reduces the pressure of overseeing the building process of a home.
It’s easier to use your bargaining power to leverage the price of an existing house. For instance, if a home that you like has been on the market for a reasonable time and a similar house in the same area is sold for a lesser price, you could use that information to get a good deal. Although, you may have to fight a bidding war.
Once you settle in in your new home, whether newly-built or bought, you need landscaping to increase the curb appeal and aesthetics of the home. However, you need to do all the work in a new home, whereas an existing home will already have some landscaping. Besides, it can take years for new landscaping to match the beauty of mature plantings.
Home Renovation Options
You can make upgrades to an existing home. There are multiple home renovation options that you can go through when you have the time and money available. It will be cheaper overall than building a new structure.
Cons of Buying
There are several disadvantages when you are buying a new home. You need to go to many home viewings before you find something you like, and chances are slim that you will get a home that suits your personality and style. You should consider the cons of buying a home before purchasing one.
Compromises on Home Style
The odds of finding your perfect home will be low. For instance, you may find a house with the ideal number of bedrooms but fewer washrooms. You’ll be forced to take what’s near your price range and compromise on your preferences. Besides, an existing place might not reflect your taste exactly. Given there are few homes for sale and demand is high, you will have to compromise on several living aspects.
Restrictions on Available Space
When you buy a house, you may find that you’re only allowed to make additions within specific boundaries. For instance, you may only be able to add upwards or sideways. You’ll also have to consider utility poles, trees, power lines, and other obstacles around the bought property. There may also be specifications on the minimum distance you can expand it close to your neighbor.
Several Maintenance Issues
An existing house may have outdated systems, which may require replacement. Having obsolete energy systems will make your home less energy efficient. Depending on the age of the house and the materials used to construct it, you may be potentially exposed to toxic substances like asbestos or lead paint. Moreover, you will need to perform several maintenance projects to eliminate issues.
Buying vs Building a Home: Which is Best?
Since buying and building a new home have negatives and positives, your unique preferences will guide you on the right path. If your dreams are to incorporate custom features in your new home and you are flexible with your new house location, then go for building. However, getting an existing home will work best for you if you’re hard-pressed for time or are particular about location.