Should you build or buy an existing home? This is a question that should be taken into consideration on your home buying journey.
There are both advantages and disadvantages to both. Taking a good look at the pros and cons will help you to make an informed decision.
So, let’s dive in and discover which one is the best choice for you.
Pros and Cons: New Construction Homes
At first, it might seem like an easy decision: many homeowners love the idea of moving into a home that is untouched and includes brand-new finishes.
New homes often include the latest style in décor, paint colors, and state-of-the-art appliances. But there are also a few drawbacks to moving into a new construction home.
Here are a few advantages and disadvantages to consider:
- CON – Cookie Cutter Curb Appeal: Have you noticed that planned communities often have a cookie-cutter appearance? When the entire neighborhood is developed by the same builder, it is common to use the same floorplans and styles for the construction.
- PRO – Custom Finishes Inside: Buying a new home before or during construction will allow you to customize the colors, products, and features that are installed. For example, the homebuilder will offer a variety of carpet, paint, and countertop options. You can create the home of your dreams without having to worry about renovations after moving in. Plus, the cost of upgraded features can be folded into your mortgage.
- CON – Unfinished Details: While the home will be “move-in ready,” most new build homes don’t include a few of the finishes that your family will need. You need to be ready to put in the time and money and possibly even hire a professional to complete the landscaping, external lights, security systems, and more.
- PRO – New Construction and Warranties: Brand new construction offers the benefit of avoiding small blemishes such as stains on the carpets, marks on the wall, or dirty corners. Not only does it feel good to be the first family to live in a home, but you can also have peace of mind knowing that active warranties are in place to cover the materials and labor. Another benefit is that you will face fewer maintenance costs because there won’t be much that needs to be repaired or renovated.
- CON – Property Values and Tax Burden: As a general rule of thumb, new build homes are more expensive per square foot compared to buying an existing property. Not only will you bear the burden of higher cost, but there is also the risk of volatility in the local market because of the lack of comparable homes in the area.
Pros and Cons: Existing Properties
While there are a few benefits of a new home, don’t overlook the benefits that can come from buying an existing property. Here are a few pros and cons if you are looking to buy a home that is already built:
- PRO – Property Character: Older homes tend to have a bit more character compared to modern suburb developments. Not only are the home designs different from the neighbors, but these properties often have mature trees and unique floorplans. Some families love the character of moving into a home that is truly personal.
- CON – Repairs and Renovations: If you aren’t someone who likes to use a paintbrush in your free time, then you might not like the idea of working on home improvement projects. Properties that haven’t been updated in a while will likely require repair work and renovations. For example, you might choose to invest money in kitchen and bathroom updates so that you can enjoy modern amenities. You can choose a DIY approach for the work that is needed or hire local contractors for help. Also, it’s always a good idea to invest in a home warranty plan which will cover any major repairs that come up unexpectedly after you move in.
- PRO – Established Neighborhoods: Often, existing homes are in desirable locations. These properties are easy to access and offer good proximity to shopping, schools, business offices, and more. If you are particular about living in a specific area that has already been developed, then there is a higher likelihood that you will be in the market to buy an existing home.
- CON – Smaller Inventory: Most home buyers have specific needs and wants on their list of requirements for the home purchase. As a result, you’ll have a smaller inventory of properties that meet your requests. If you can’t find what you are looking for, then you might need to make some adjustments, such as purchasing a home that will be renovated, or choosing a different area.
- PRO – Cost and Property Values: Usually, existing homes are less expensive per foot, which means there is more room to negotiate price on the purchase. Additionally, there is an established local real estate market with comparable properties, making it possible to determine property value before the purchase. Existing homes also have a lower tax profile, helping you save money on property taxes.
When it comes to buying a home, there isn’t a right or wrong answer.
Each family is unique, which is why it is important to identify your top priorities for the home purchase.
Even if you choose to look at new construction homes, you should avoid working with the builder directly. It is smarter to hire an experienced real estate agent who can protect your interests and assist with the contract negotiation.