Buying vs. Building a House
Many homeowners out there spend plenty of energy and time designing or searching for their perfect home right before they make any deal or property investments. The property’s condition, location, proper taxes, market trends, homeowner’s association fees, and the price are factors that are factored within a house hunt.
The home-buying procedure contains a lot of important choices, but the first-ever decision they have to make is whether to build a home or shop for an existing one. In this article, we’ll give you an outline and help you decide whether you should buy or build your perfect house.
Buying an Existing Home: Pros and Cons
When searching for a brand-new home, many individuals think of buying it. But buying a new home comes with both drawbacks and benefits. Here, in this section, you will find information that can help you decide whether to purchase an existing home.
━ Buying a House: The Pros
Here are some of the pros or benefits of purchasing a pre-existing home.
Spending less time waiting for construction: The construction projects need some time to finish. When people don’t have much time to waste, purchasing a turnkey home can help them proceed further quickly and effectively.
Existing homes are cheap: Generally speaking, you will find that buying a home is a lot cheaper. Home loans are not that risky compared with land acquisition loans and come with an excellent interest rate and lower down payment.
Options for home renovation: Buying a home will give you the option to make upgrades. But there is nothing to rush, and you can go for the upgrades when you have the money and time available.
Options available for developed areas: Some suitable plots have already been transformed into homes in several areas. When you purchase an existing property, it will let you stay in the area of your choice.
Mature landscaping: Almost all existing residential properties come with landscaping. This means you don’t have to spend your funds on landscaping.
━ Purchasing a Home: The Cons
Below are some of the drawbacks or cons of purchasing an existing residential property.
Bidding war: Depending on the home-buying market, you might experience competition for the house you want to purchase, which can lead to a stressful bidding war.
Low energy efficiency: It will not be that energy efficient when purchasing older properties. Due to such reasons, it can lead to much higher energy costs.
Maintenance problems: Many existing properties contain older appliances like electricity and plumbing. Since they are old, you might face some serious maintenance problems sooner or later.
Negotiation on the floor plan: Homebuyers might face difficulty when looking for an existing property with a floor plan they need. So, they have to make some negotiations.
Effort and time: While looking for the “perfect home,” the entire process can be pretty time-consuming. In these situations, you must work with a real estate agent to make the process quicker and easier.
Building a Home
Building a house is not the same as buying one, and they will also not provide you with the same type of convenience that you can get from an existing property. You have to look for land, which should be located in a proper neighborhood. You also have to look for the builder or architect and pick all the components for the brand-new structure. Building a home will also come with its own set of drawbacks and benefits. Here’s what you should know about:
Risk of Building a Home
Here are some of the risks of building a house.
⦁Risky loan: Due to the lack of collateral, land loans will be difficult to get. These land loans also come with a much higher down payment along with a high-interest rate.
⦁Stress: Building a home can be stressful for many individuals.
⦁More time: Building a house is not a quick process, it’s a lengthy procedure and can take a few months or even a year.
⦁More effort: When it comes to building a house, it needs a hands-on approach. You have to work with many people to achieve your dreams and make numerous decisions.
⦁Unexpected expenses: You will get an estimate for the costs upfront, but unexpected costs can also occur throughout the entire home-building process.
Advantages of Building a Home
Even though there are some risks of building a home, there are some advantages.
⦁Full control: When you have a floor plan that you want for a specific location, building a house will be the right decision to take. It will provide you with the control you want.
⦁No toxic items: Building a home will reduce your worries about materials like lead paint or asbestos because they will be built from scratch. So there will be no presence of such toxic materials.
⦁Customization: You have the power to make all the decisions when constructing a house, so it will reflect on your taste and style accordingly. In simple words, you can make customizations according to your choice.
Buying vs. Building a Home: Cost Comparison
Check out the cost comparison of building and buying a home:
Cost of Building
When you have decided to build your dream home, here are some costs you need to know about.
⦁New appliances: You don’t have to live with older appliances anymore after building a house. Instead, you have to buy brand-new appliances for your new-built home.
⦁Building materials: You will require basic materials to build a house, which quickly adds up.
⦁Numerous loans: When building a home, you will require two separate loans so that you can fund the construction of the brand-new house. These two loans are land loans and construction loans.
Cost of Buying
Here is a cost-break up of home purchase:
⦁Maintaining older components: When there are older components in the home, you can expect more repairs and maintenance. Building materials will also lose their power as time passes by.
⦁Commission of the real estate agent: When you purchase an existing home, this will be an expense that will drive up the total cost.
Should You Buy or Build a Home?
Whether you want to build or purchase a home will depend entirely on you and your investments. If you do not want to waste much time and don’t wish to allocate funds to build a house, you can choose to buy. Otherwise, you are free to construct your dream home from scratch. No matter what your choice is, we hope that this article would be of great use.
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