Should you build a brand new house or just buy an existing one? I’ve done both, so today I’m comparing the 2 options head to head.
Customization: One of the main advantages of building a house is the ability to customize the design to meet your specific needs and taste. This includes things that would be hard or impossible to change on an existing home like the layout, the number of bedrooms and bathrooms, and the architectural style of the house. Not to say that you can’t renovate an existing home to get CLOSER to your ideal design, but it’s way easier to customize a house that you’re building from scratch.
Timeframe: An existing home is already built, so you can move in right away. The timeframe for completing a new build is unpredictable and hard to plan around. It can take years to complete a new property and you got to remember that you’re going to have to pay to live somewhere else during the course of construction. Also keep in mind that new builds almost always have some unforeseen delays and unexpected expenses.
Energy-efficiency: New construction houses are built according to the most current building codes which call for higher standards of energy efficiency. This means that they will have more energy efficient materials, especially when it comes to the insulation and windows, and they’ll also have more efficient mechanical systems like HVAC and sometimes solar, as well as more energy efficient appliances. All of these things in combination will lead to lower utility bills for you over time.
Location: So in general, Existing houses are more likely to be located in more desirable neighborhoods with established communities and businesses. Whereas most new builds are located in newer developments where there never seem to be any trees. If you want to live in a specific neighborhood because of its great schools, its shopping or entertainment options or its public transportation, then buying an existing home in that neighborhood is the most straightforward way to provide you with those benefits. Now, it is possible to build a new home in an established neighborhood IF you’re able to find a vacant lot that you’re allowed to build on, but keep in mind it’s probably going to be pretty expensive just to buy the land.
Repairs and renovations: This one clearly goes to the new build since all the materials and mechanical systems are brand new and shouldn’t need to be replaced for at least 5 to 10 years. But it’s not like all existing houses out there are just falling apart and need renovations immediately after you buy them, but repairs are going to come up more often just because everything in the house is older.
Financing Options: There are many straightforward financing options available for buying an existing home. There are countless lenders offering traditional mortgages with standard terms that are based on common requirements for income and credit. Financing for new construction however, is definitely more difficult and complicated to get, and there are far fewer lenders willing to finance new builds because they’re considered more risky. New construction lenders will typically need to see architectural plans, a detailed budget, and a signed contract with a licensed builder before approving a loan. Also ,the terms on new construction loans are typically less favorable than for an existing home. The interest rate is usually higher and most construction loans also require you to pay interest during the entire construction process and that interest does not go towards any loan repayment.
Safety: Again, new houses are built to the latest building codes which typically means that they are safer than older existing homes. So for instance the structure of a new build is more likely to hold up in areas with a high snow load or frequent earthquakes. And New builds located in areas with a high risk of wildfires are typically required to have fire resistance exterior siding materials and interior sprinkler systems while new builds in hurricane prone areas will require windows that can withstand high winds.
The Cost: It’s highly dependent on several factors including your local real estate market, your labor market, and your ability to plan, budget, and negotiate with contractors. I would say that in general, it takes less effort to find a good deal on an existing property because there are simply more available options, HOWEVER, if you put in the time in doing your research and you negotiate well with contractors to stay on a strict budget, it’s definitely possible to build a good quality new house for less than the cost of buying an existing one.
