Are you ready to buy into the American dream and own a home? Many people want to be homeowners, but they don’t know if they should buy an existing home or build a new one. Both options have pros and cons, and your situation, finances, and time restraints dictate the best choice.
Buying An Existing Home
If you’re looking into buying a home already built, you need to understand the advantages and disadvantages. One of the apparent benefits is that the house is already standing, so there are no long waiting times.
The average home closes within 60 days from the date you sign the purchase agreement so that you can be in your home in a short period.
- Pros of Buying an Existing Home:
- A Cheaper Option
In most instances, buying a home that’s already standing is the most cost-effective option. However, if you don’t have a substantial down payment, many programs can help you with down payment assistance or other options. For instance, FHA only requires 3.45 percent down instead of most programs that require a full 20 percent. In addition, land loans tend to be a bit riskier, so you get a better interest rate on an existing residence.
- More Options
Depending on where you want to build, your options may be limited. When you choose a home already built, it opens a wide variety of options to choose from. In addition, you can get the neighborhood with the schools you want easier when you purchase preexisting properties.
- No Landscaping Woes
Landscaping is a big issue when it comes to new homes. It’s an added expense that many try to cut by doing it themselves. However, living with mud isn’t attractive, and buying an existing place eliminates this issue.
- You Can Customize At Your Leisure
You can make upgrades and customize an existing home when your time allows. You’re not under any pressure to make changes to move in.
While there are many advantages of buying a home already built, consider the cons of buying an existing home:
- It’s a Long Process
Finding the right house for your family can be challenging. You’re trying to put yourself into someone else’s layout, and it’s not always going to fit. The process of finding the right spot that will work for you can be longer than you think.
- Bidding Wars
In a seller’s market, buyers are at a disadvantage. There’s always the chance for bidding wars and low inventory. As a result, you might have to pay more to get what you want, or you might lose the home of your dreams over a few measly dollars or contingencies.
- Floor Plans Aren’t Perfect.
There’s always give and take when it comes to purchasing an existing home. Nothing is going to be perfect, so you must make some sacrifices.
- Maintenance Issues
All homes, even new ones, come with maintenance issues. However, suppose you’re buying something with decades of age on it. In that case, you’re likely to have problems with energy efficiency as well as things like mold, termites, structural issues, and other age-related difficulties.
- Energy Efficiency Issues
Another thing to consider is that older homes aren’t as energy efficient as newer ones. So, it could cost you more in the long run to buy that craftsman you desire.
Building A New Home
There are many considerations for building a new home that you should consider. Having the power to design a space where you will create memories is an attractive option.
- Pros of Building a Home:
- You Have the Say
Once you sign on with a builder, you have a say on the floor plan. You can pick what works for your family and tweak things as needed.
- No Competition From Other Buyers
The first step is to buy the land, and then you build what you want. There are no competition or bidding wars.
- Less Maintenance
New homes come with a warranty package, and you won’t have near the maintenance issues of an older home.
- No Toxic Materials
Another issue with buying an existing home is that there could be lead paint or asbestos to handle. In a new build, these toxic materials aren’t used, so you’re safer.
- Energy Efficiency
New homes are built with energy efficiency in mind so that you will save money on utilities.
- Cons of Building a Home:
Here are the cons of building a home:
- More Challenging Loans
Getting a land loan can be a challenge, especially if you don’t have sufficient collateral. You can expect to pay a higher down payment amount as well as higher interest rates.
- Unpredictable Costs
When you choose your home package, you’re given an estimate of costs. However, there are always unexpected things that can add to that number.
- Lots of Effort
There are many decisions and people that you must interact with along the way. It requires a lot more effort from you, and all the decisions can be overwhelming.
- Take Time
It’s a long process from start to finish on building a new home. It can take six months or more, depending on the market. All of this can be very stressful and hard to handle when trying to work and manage life.
Many home builders don’t include landscaping, or it’s something left out of the package to cut costs. Still, it’s not just as easy as throwing some grass seed at the earth. Landscaping is an expensive consideration.
Cost Comparison: What is the Best Option?
There’s a lot to consider when you contemplate whether to buy a home vs. building a home. Purchasing and building both can be overwhelming processes, and there are positives and negatives to both. Buying an existing home is excellent for people who have time constraints, and they don’t want the stress of picking a floor plan, dealing with land loans, and unforeseen expenses.
However, building the home of your dreams with the floor plan you desire is always an excellent option, especially if you have the time and money to devote to this process. Still, finding the right builder is a challenge, and many must go into cookie-cutter housing projects to get the best price.
Ultimately, the best decision depends on your circumstances, finances, and time restraints. Whether the housing market is leaning towards buyers or sellers will also factor into this equation. When there’s little inventory and housing prices are inflated, you might want to build, regardless of the extra wait time.
For more insight and to see what’s available, contact Sheridan Solomon & Associates today and talk to one of your real estate experts.