Building a New Home vs. Buying an Existing Home
Every homeowner has asked the question: Should we buy an existing home? Or should we think about building a brand new home instead?
Here, we’re going to quickly discuss the pros and cons of each, allowing you to make your own decision in the end. And as always, if you have any specific questions we recommend you contact a trusted local real estate expert for help with your decision. A Realtor can help you understand the market conditions as well as short-term and long-term implications of both building new and buying re-sale.
The Case for Building a House
Pros to Building a House: The Columbus real estate market has been extremely strong for Sellers over the past years. There are more Buyers than Sellers, so prices have risen and homes are selling in record time. With homes flying off the market so quickly, competition to find an existing home can be tough. When you build a home, the competition factor decreases.
Customization to your home when building is another huge advantage. When building, you’ll get to personalize all the details of your house when you construct from the ground up—from the layout , cabinets and flooring to the sinks, lighting, paint colors and doorknobs!
Additionally, new homes are built to meet current building codes, they are often more energy efficient than older homes, and they often incorporate up-to-date technology features like USB-enabled outlets and mobile-controlled HVAC and lighting.
When building, for the first few years, you’re less likely to deal with big-ticket maintenance issues like leaky roofs or failing heating and cooling systems. Plus, many home builders offer a limited warranty if something should break.
Cons to Building a House: It takes an average of about 7 months to construct a new build, according to the National Association of Realtors. If you sell your previous home in order to pay for the construction of your new one, you may need find a rental unit in the meantime as construction goes on.
Here’s another biggie: Most buyers go into a home purchase expecting to wheel and deal the negotiations on the price. While that can certainly be common in the re-sale market when buying an existing home, brand new homes are usually different. Most times, there’s not a lot of leeway on closing costs or purchase price. What the Builder tells you is the price is what you end up paying. Plus, sometimes there are unforeseen costs when building, so the price may even go UP. You need to be prepared.
Speaking of unexpected out-of-pocket expenses: They have a funny way of sneaking up on new home buyers. That’s because those dollar signs you see on the sticker are often just the tip of the price-berg. Upgrades cost money and may or may not be rolled into your contract price. Play it safe by budgeting for them when beginning to discuss your budget with your builder. Don’t know where to start? Begin by asking your builder these questions:
- How much does your typical buyer actually spend on upgrades?
- What’s included in the base price?
- What will be an additional cost at closing?
This is where having your own real estate agent comes in handy. An experienced agent knows what makes the different builders in your market tick and brings a creative mind to the negotiation table.
Work with your real estate agent to gather as much information possible about building a house so you’re not blindsided by extra costs.