When it comes to homeownership, one of the biggest hurdles is deciding whether to build or buy a home. Buying is often convenient and more affordable, but there are fewer options. On the other hand, building is more expensive and time-consuming, but it is more flexible for prospective homeowners.
This article will look at the pitfalls and the available options for both builders and house buyers.
Which is more affordable, to Build or Buy a Home?
Cost is usually one of the main factors you consider when trying to determine whether to build or buy a home. It is, generally, more affordable to purchase than to construct a house. The cost of building was around $485,000, while buying was about 300,000 in 2019. That is, according to the National Association of Home Builders.
Before you decide to build or buy a home, you also need to be careful not to overlook hidden renovation costs. An existing property comes with extra expenses for countertops, new appliances, and furniture.
Sometimes the contract does not include those additional costs. That’s why you should go over your agreement, preferably with real estate lawyers. You should make sure you have a grasp of the terms before you commit to buy.
There are also other factors you ought to consider when choosing whether to build or buy a home:
Cons of Building a Home
It can take seven months or more to finalize the construction of your home. That duration does not factor the delays you may experience during the approval and design stages. Realistically, you can expect the entire process to take at least a year.
As you wait for the construction to be completed, you will require accommodation for the time being. The waiting period incurs additional costs that are not there when buying a home. An existing home may be a more suitable option if you are in a situation that requires immediate relocation.
Also, in the course of a building project, there are likely to be cases of unexpected delays. Some materials may not be available on time. One of the contractors may fail to show up, and that could throw your project into confusion. Remember, every delay will incur additional expenses either directly or indirectly.
Building projects can be time-consuming and stressful. There are many decisions you’ll have to make in the course of building your home. You’ll need to decide on the land to buy as well as make design choices for countertops, fixtures, and cabinets.
Besides the contractors you’ll have to manage during the process, you may also require real estate legal services.
The assistance from legal services can help you pinpoint problems that you may not have noticed. You may have bought a residential property to build on, where new constructions are about to start. Building in such an area means that there will be noise and dust pollution you’ll have to contend with as the project unfolds. An industry expert can help you navigate such issues with ease.
One critical factor you have to consider when choosing whether to build or buy a home is landscaping. Developing the lawn, shrubs, and flowers can take a considerable amount of time to complete successfully. Landscaping is often fraught with problems and delays. Unless you are a green thumb, you may have to hire an arborist and landscaper.
Unlike shopping for homes for sale, you will not have to deal with the seller when you choose to build. However, that also means you cannot negotiate the price. Builders do not often provide adequate room for negotiating the costs of construction. With existing houses, there is more opportunity to settle on a better purchase price.
Pros of Building a House
When deciding whether to build or buy a home, you may want to consider the advantages of hiring a builder. Building a house may be more convenient, and you can always follow a custom home building process.
After a home building project, you should be ready to get into the new house with the latest fixtures and equipment. A new home is also more likely to comply with building code. It will be more efficient due to the updated HVAC equipment and fixtures. You can expect to have lower utility bills and fewer renovations.
The custom home building process allows you to customize your home to your tastes and preferences. You have the power to choose the type of countertops, cabinets, and the fixtures you want. Most homeowners get a sense of satisfaction getting into a property that they were part of from the beginning.
Since you’ll be making most of the choices during construction, you will effectively reduce the need for home remodeling later. In the first few years, there are fewer roofing issues or incidences of HVAC equipment failure.
Additionally, the process of residential home buying is very competitive. According to the National Association of Home Builders, a house is only in the market for not more than 22 days. By planning and constructing your own home, you won’t have to deal with chasing down residential houses on sale.
Managing the Project and Checking the Budget
Both buying and building have their pros and cons. The points shared above are a general assessment of the two choices in residential property ownership. Before you decide whether to build or buy a home, it is wise to take time to evaluate your options.
The best first step you can take before making a decision is to talk to an experienced real estate agent. They can present you options that are currently in the market for both purchasing and building your residential property.
Real estate lawyers and agents have a keen sense of the direction the market is likely to take in the future. However, you will have to find an honest and professional agent to help you decide whether to buy or build a home.
Curbing the Costs
Since one of the biggest problems with building is with the expenses, several factors can raise the prices. There are several ways that you can manage the costs:
Don’t Build too Big
When deciding whether to build or buy a home, many people opt for a large house with plenty of open spaces. However, you don’t need a mansion for you to fulfill the dream of living in a house that’s homely and cozy. There are many design ideas to maximize interior space for maximum comfort.
Before you begin your home building project, ensure that the design and architecture are efficient. You may want to go for a reasonably sized house since larger houses demand more maintenance. That means there will be additional tasks you’ll have to do regularly.
Also, a bigger building will require more energy to heat and cool throughout the seasons. Repairs for HVAC equipment or renovations around the house are bound to be more expensive in terms of scale. A 2,500 to 3000-foot home can sufficiently address the needs of an average American family.
Consider the Resale Value
Whether you choose to build or buy a home, you’ll need to consider the property’s resale value. The implication of that is that you may have to buy or construct a house that will not be attractive to property buyers.
Cabinets and flooring can have an impact on the perceived value of a residential property. The height and style of the cabinetry can determine how long the house stays in the market. Other aspects you should consider include plumbing fixtures, bathroom fittings, decorative lighting, to name a few.
You should also keep in mind that some styles and trends are only relevant for the short term. A marble countertop may be trendy today, but after a few years, buyers may deem it outdated. That’s why you should carefully consider the design of the building.
When you are in the process of buying a home, finding a residential property that fits your needs can be challenging. The competition for homes for sale is high. Many buyers may have to settle for a property that requires some renovation.
Home remodeling doesn’t always have to be expensive. Some involve aesthetics, but there are projects to enhance the structural integrity of the building. However, you need to pay attention to the types of renovations you’ll have to do.
Some costly renovations you should avoid may include:
- Finishing the Basement: If you choose to buy a home, you should, preferably, opt for a property with a proper basement finishing. The process of improving the aesthetics of the basement can be expensive.
- Kitchen Cabinets: Buyers often look for cabinets and storage options. Even though it can raise your home’s value, it is often difficult to do, and it’s also likely to raise costs.
- Countertops: Countertops are trendy, but that can be problematic. If the aesthetics run out of style, it could have the opposite effect on your home’s value. Be careful when choosing the type of design you want for your kitchen. A timeless, classic style will always the best option when you are not sure what to go for.
The construction of the house is a project that requires diligent management to check the budget. The process is time-consuming, and planning should begin several months before the project commences. Before you decide whether to build or buy a home, note that building preparations can take up to two years.
It is advisable to involve yourself in the process so that you are aware of any changes in the course of the project. First, you should make a point of visiting the construction site. It will help you determine when you need to make adjustments, while it is still possible to do so.
You need to keep in mind that there are always additional expenses in virtually every construction. The price of building materials may spike throughout the project. You should, therefore, have provisions in your budget to make the necessary adjustments.
Some homeowners choose to hire a contractor to oversee the construction. If you decide to manage the process on your own, you should be aware that you’ll be responsible for other contractors. That option will force you to change your daily routine and commit to the project.
Types of Homes You can Build
While construction is generally a more expensive undertaking, it depends on the type of house, as well as the materials and process. Before you choose whether to build or buy a home, consider the following types of buildings.
- Manufactured Homes: As the name implies, the construction happens entirely in an industrial plant. The builder takes the house to the site once it is complete. There is usually climate control to retain integrity during the custom home building process. Because of the careful management of materials and the procedure, it is more affordable than conventional houses.
- Prefabricated Houses: The construction of prefabricated houses also takes place in an industrial plant. The difference is that the assembly of the house will happen on-site rather than on the industrial floor. Prefab homes have to comply with local codes. They come with the option of adding custom features and accessories. Prefab homes are also more affordable to build.
- On-Site Homes: This option is more involving since the entire process has to take place on-site. It is more expensive than manufactured or prefabricated homes.
Regardless of the type of construction you choose, there will be expenses for preparing the site. There may be tree cutting, plumbing, and sewer installation cost you will incur. You should evaluate those expenditures when deciding on the type of house to build.
Many factors will depend on your preferences and even your personality. You ought to keep that in mind when choosing whether to buy or build a home. If you adhere to the principle of careful planning before making a decision, you have high chances for success.