In a housing market where inventory is snatched up quicker than you can say “Let’s make an offer,” finding the home of your dreams can take time. Perhaps the thought has crossed your mind to build a home instead of buying one. But is one option better than the other? Both come with their share of pros and cons, and it all comes down to what better suits your wants and needs. Here’s what you need to know as you weigh your options:
The Pros of New Construction
- Get exactly what you want. When you’re building a custom home, you can design everything to suit your preferences, from the building materials to the square footage to the layout. Even with a contractor-built home, you typically get to choose from a set of floorplans and fixtures, allowing you to personalize the home to your tastes.
- Fewer repairs. Everything from the roof to the appliances are brand new in a newly constructed home. This means you’re unlikely to need any major repairs for a while, saving you money and providing you peace of mind.
- Energy-efficient. Newer homes are built with a tighter envelope – meaning all the components that help separate your home from the elements, such as windows, doors, roof, walls and foundation. A tight envelope improves energy efficiency and new appliances are also more energy-efficient than older models.
The Cons of New Construction
- Higher price. The cost of a new home varies widely depending on your location, the size, the finishes you choose, and whether you’re building a custom home or buying one that’s already built. But in general, a new home will cost you more than an existing one. And if you go the custom route with lots of luxury options, that number can climb higher.
- Long wait times. It normally takes about seven months for a builder to complete a home, and even longer if you’re working with a contractor on a custom build, according to the U.S. Census Bureau. During the pandemic, it’s taking even longer, with increased wait times for materials and permits, not to mention the lack of skilled laborers. In short, know that it will take a long time and that unforeseen delays are a near certainty.
- Location & landscaping. The pandemic prompted a sudden move out of cities and into less populated areas, which could mean longer commute times to work, school and other conveniences. In addition, many builders do not include landscaping in the project, leaving you to complete your yard and add curb appeal.
The Pros of Existing Homes
- Quicker buying process. In this market with minimal inventory and strong competition, it’s difficult to pinpoint how long it might take you to find a home. According to Zillow, it takes an average of 4.5 months to shop for a home. Additionally, the average time to close on your mortgage is about 50 days. So while it could take several months from start to finish, you should experience fewer uncertainties and a more predictable move-in date.
- Community & charm. Existing homes tend to be in more established neighborhoods where you’ll find a stronger sense of community and amenities. Access to parks, schools, and grocery stores aren’t just convenient, they can increase your satisfaction with where you live. And if you’re trying to avoid the cookie-cutter aesthetic, you’ll have a lot more architectural styles to choose from.
- More affordable. As of September 2021, the median sale price of an existing home was $56,000 less than a newly built home. So from a sticker price perspective, buying resale might be cheaper.
The Cons of Existing Homes
- Upfront repairs. A home that’s been lived in previously is going to have some wear and tear that needs to be fixed, along with older appliances that may need replaced before you move in. You’ll need to anticipate repair and maintenance issues sooner than you would in a brand-new home.
- Less energy-efficient. Along with the older appliances and systems that are common in existing homes, you may also have less efficient windows or insulation. Of course, you can remedy this with some energy-efficient upgrades, but that increases your total costs.
- Might require a remodel. In an existing home, you inherit the floorplan. That means you may face aesthetic upgrades or even major renovations. Making improvements takes time, planning and money.
As you can see, there’s no right or wrong choice. Whether you buy or build, you have to decide which advantages outweigh the disadvantages. Whatever you choose, contact a trusted mortgage lender to help find the best financing option for your next dream home.