Buy a Home or Build One : Which is Right for You?
Buying an existing home and building a new one both have advantages and disadvantages. To help you make a decision, look over this list and ask yourself which of the following factors are most important to you.
Value for the price
In general, you will get much more for your money if you buy a home that has already been built. The previous owners will have already borne the expense of putting in a lawn, shrubbery, window coverings and other necessities. In addition, no architect needs to be hired.
Risk
When a new home is built, it often takes a few years for problems to surface. The basement may develop a leak, the foundation may crack as it settles, or the swales dug into the earth may not properly divert water away from the house. All of these problems are expensive to correct. With an existing home, an inspection will reveal these problems before the purchase.
Two other risk factors that may unexpectedly drive up the price of new home construction are rocks and radon. Often, a builder can’t determine ahead of time whether there will be large rocks that need to be blasted away and removed. The ground may emit radon gas, a hazard that won’t be known until the house is built. Radon mitigation systems are costly to install.
Customization
Homebuyers who want a custom look or architectural style may not be able to find existing homes that meet their tastes. Some buyers need specific floor plans such as an in-law suite that are seldom on the market. In this case, they may look at specific new construction homes that can be customized to their needs, or they will look to build themselves.
Location
Sometimes there simply isn’t an existing home in the location you want to build. If it is a remote location, add into your total cost any roads that would need to built, septic tank installation and the cost of bringing water, electric and gas lines to the area.
Other buyers have their eye on a location that is already built out, and there aren’t any vacant lots available. Home buyers who want a short commute to a job in a large city often have no choice but to purchase an existing home.
Aggravation
Building a dream home is a lot like bringing a child into the world. The result can bring a lot of joy, but the process of getting there can be painful.
Surrounding homes
With an established neighborhood, prospective buyers can get a feel for the direction of the neighborhood. If nearby homes have deteriorated, have been turned into rental properties, or have gone into foreclosure, it can be a red flag that property values are depreciating. If yours is the first home built in a subdivision, there is no guarantee that your neighbors will maintain their properties. On the other hand, if you find a vacant lot in a desirable established neighborhood, building a new home may be an excellent investment. For example, if you are looking for newly established neighborhoods that offer prebuilt homes or new designer homes in prime locations. You can also see if there are any other benefits local to you, like a dog park or a community garden that can help you connect with your new neighbors.
