Buy or build? 

A competitive housing market often lends itself to the thought - should I build a home instead of fighting for an existing one?  While the question is completely understandable there are numerous factors you need to take into consideration when deciding to buy or build and we’re here to help work through the list of pros and cons on both sides!

If you’re thinking of buying vs. building...

One pro of buying an existing home is that if you’re trying to move quickly, buying an existing home means you can settle down much faster. Building a new home or buying a fixer-upper requires a lot more waiting, as construction takes time!

Also, it is generally less costly to buy an existing home, but that also depends on the market at the time of purchase. A home loan is less risky than a land loan, so a home loan usually comes with a lower down payment and a better interest rate!

If you’re interested in buying in an already developed area like a city center or established suburban neighborhood,, it might be hard to find a lot to build on, as most have already been turned into homes meaning that buying an existing home can better place you in the location you want. Once you buy, you can make your own updates and upgrades to your home when timing and resources allow!

Of course, there are some cons to buying an existing home as well. One is the stress that comes with home buying. Searching for the right home takes time, and right now, buyers are facing high prices and bidding wars for the properties that are currently available on the market. Working with a real estate agent you trust will make the process less stressful and easier for you! 

Also, finding the perfect home that already fits your aesthetic or design wants can be tough. You will most likely have to compromise in one area or another if buying an existing home. 

Additionally, with older homes comes more maintenance, and you might run into those issues sooner rather than later if you buy. A solution to this can be a home warranty so you can budget for those repairs. 

If you’re thinking of building vs. buying an existing home...

Building a home from the foundation up gives you more control over the final product.If you have a dream floor plan or kitchen in mind, then building a home will give you the control you are looking for. You get to work with the builder to make the design decisions (within reason) when you build!

Once you've found and purchased the perfect piece of land, you no longer have to worry about competing with other buyers. But the next step of actually building adds another level of competition --construction. Your builder will be competing against other builders for limited construction supplies and labor in the current market which can result in completion date delays and inability to secure your preferred material like the hardwood floors or the kitchen appliances you've been planning on.

Less maintenance can be another perk of building, as new construction and appliances will come with warranties and guarantees. You also won’t have to worry about harmful materials like asbestos or lead paint in a new build. 

One con of building is that it is more expensive to finance due to the lack of collateral. Land loans can be harder to obtain, and often come with higher down payments and interest rates. Buying in a development that is being built already can prove to be a workaround as things like extended rate lock programs exist for situations like this. Lock in your loan now but wait until the home is built to close.

Also, while you might receive an estimate of the total costs, it is common for unexpected costs to come up throughout the project. Recent studies show that the average new construction project goes over budget by at least 16% – that is a significant amount when we are talking about home costs! You will want to take that into account when determining what you can afford in a new build home.

Building a home also takes much longer than just buying a home that is already built. With the supply chain issues, labor shortage, and unpredictability of the construction industry, it is hard to know just how much someone will be affected by delays which can be a deal breaker for someone on a timeline. 

It might be more stressful, but in the end, you will have your dream home. It also takes more effort and is much more hands-on, as you will have to work with a variety of people to create your dream home. 

To Summarize

The bottom line is, the decision can be tricky. There may not be a right or wrong answer! Since both options have many pros and cons, it comes down to your own unique situation.