Buying a home can be an exciting transaction. Whether you are buying your first home or upgrading to a new home, the process of home buying is one that provides you with a great deal of food for thought. One of the decisions you need to make is whether you want to buy an existing home or whether you should build a new home.
One of the first things to consider is the cost involved. In many cases, it costs less to buy an existing home. Some older homes can be more affordable, especially if you are a first-time buyer. You can often get more bang for your buck when you buy an existing home.
However, there are circumstances when building can be less expensive. If you can do some of the work yourself, you can reduce the cost that goes into the home. Sweat equity can be one way to reduce your home building cost. Check with the city to see if there are programs that encourage you to use sweat equity to build in certain neighborhoods. You can also be your own general contractor in some cases and hire specialists to help you build your home.
Compare the costs of buying an existing home versus building before you move forward. What you ultimately end up doing might depend on the total cost in the long run.
Realities of your financial situation
Don’t forget to consider the realities of your financial situation. In many cases, an existing home comes with fewer hurdles to overcome with financing. You might be able to use a lower down payment with an existing home. When you build new, you are often required to put at least 20% down for the construction loan. While this isn’t always the case, many would-be home builders find that it’s harder to save up the money for a down payment on new construction.
Another consideration is how long it can take before you move in. With an existing home, you are likely able to move in much faster. As soon as the home inspection is complete and the paperwork is done, you can move in. When you build new, you have to wait until the home is finished before you you can move in. If there are delays, this can be disappointing, and impact your living and financial situation.
What do you want in a home?
While counting the costs, don’t forget to consider what you want in terms of lifestyle. If you buy an existing home, there is a good chance that you won’t be able to customize it as much as you would like — at least not without spending a great deal on remodeling.
Building a home gives you the chance to create something that you like. You can customize the number of rooms, the layout, and more. You can also often choose a plot of land that has the acreage you want. Everything from the landscaping to the flooring to the light fixtures is chosen by you when you build. You can choose from base plans (often customizable) from builders, or you can hire an architect to design a home that fits your needs and your life priorities.
It is a good idea to hold off on building if you are a first-time homebuyer. In many cases, you might not know what you want in a home, unless you’ve rented a couple of homes in the past. Building requires a lot of planning, work and expense. If you build, you should know exactly what you want in a home, and understand how to get it — and be willing to pay the cost.
By Miranda Marquit, Staff Writer