There are many factors to consider when deciding whether to buy an existing property or to build a new home. The debate over which option is better for buyers is a real estate argument as old as the profession. We have broken down the positives and negatives of these possibilities to give homebuyers more information on how to make this difficult choice.
Building a Custom Home
Constructing a home from the ground up is ideal for those seeking a uniquely designed residence catered to their needs. Being intimately involved in each stage of the decision-making process greatly increases the likelihood of achieving your exact preferences. Collaborating closely with a custom home builder ensures that your specific needs are addressed, with the flexibility to make adjustments as your home takes shape.
Advantages of Building a Custom Home
- Building a home from scratch is a great option if you are looking for a custom-made and designed house. You are much more likely to get what you want in your home if you are involved in every step of the decision-making process. Working one-on-one with a builder can ensure that all your requirements are met, and even make changes or alterations along the way if the building is not up to your standards.
- Building on an open plot of land also gives you the freedom to pick a location. By researching the best school districts and property values, you have more independence in choosing the right place for you and your family.
- New homes are often more energy efficient than older houses. New HVAC (heating, ventilation, and cooling) standards require builders to comply with up-to-date laws on building. Better efficiency is good for the environment and can provide significant annual savings on utility bills.
- By building your home from scratch, you do not have to deal with a previous owner’s ideas of what decorating styles look best. While a previous owner may think shag carpet looks great in the living room, you might have a more modern take on floor coverings. Don’t get stuck with a previous owner’s bad taste; building your home lets you customize the house to your liking.
- A new home may be better for your health. Older homes used lead-based paints, asbestos, and may contain molds that will affect residents. Complying with strict guidelines ensures that builders will build the safest possible home for your family.
- The resale value is much higher on newly built homes than on existing, older homes. Although most home builders plan on staying put for the foreseeable future, this gives them the peace of mind to know that if they do need to move, their investment in building a new home will pay off.
- Building a new house gives residents a level of unparalleled satisfaction. Using their imaginations to create a distinct and custom home is a thrill for homebuilders.
- Negotiating directly with the builder is often easier than working with a real estate agent. By cutting out the middleman, homeowners can cut their costs by thousands of dollars.
- A newly built home has plenty of electrical outlets. This may seem unimportant, but new homes give you more freedom to rearrange your electronics. Older homes lack the abundance of electrical outlets that newer homes have.
Disadvantages of Building a Custom Home
- Building a new home often means a very high cost. According to data compiled by the National Association of Home Builders, the median new home price in 2023 was $425,786. Part of the reason for this, however, is the high cost of a construction loan and associated closing costs, which Madison eliminates to keep costs down!
- You must trust the contractor. It can be very hard to find a builder that suits your needs and the cost you have in mind. Make sure to read any documents thoroughly or have a lawyer vet any paperwork, to protect you from legal woes.
- Custom-built homes may take longer and choosing every element of the new home can be time-consuming for property owners. On top of this, you may even have to arrange temporary housing while your house is being built. This means more stress from additional moving days.
- Homebuilders have to worry about access to existing systems like water supply, electricity. Will the area you are looking to build on need special permits? Many government hurdles can delay the time it takes to build your new home.
- The markup can be high on builder’s supplies and labor. If you end up with a builder who is untrustworthy or has shady business practices, they can easily hide fees and charges into the total cost of your new home. Make sure you choose a home builder with years of experience building trust in your county.
- Building a new home means you will probably not be located near the city center. Most of that land has already been developed and there is not available land nearby. You may end up having to build 30 minutes or more outside of an already developed area to get a good location.
Home Building Summary:
While building your custom home can be time consuming, you are more likely to get your dream home this way. If you decide building a home is the best option for you, make sure to follow a detailed checklist to avoid unexpected surprises.
Buying a Home
Opting for an existing home offers immediate convenience. The established structure and its history suggest that any initial issues have likely been addressed, providing new homeowners with a sense of reliability and the comfort of moving into a space that has been tested over time. However, modifying an existing home to suit your needs can be a daunting task. Achieving the ideal layout or making significant changes to a pre-existing floor plan often involves a considerable investment of time and money, potentially outweighing the initial convenience of an established home.
Advantages of Buying a Home
- Buying a home gives you a level of convenience you can’t get from building. The structure is already set and has been established for some time, which lets you know that some of the kinks have probably already been found and worked out by previous owners.
- It is much easier to visualize the layout of rooms when you buy a home. Building a home makes it harder to see the finished layout, and adds to the worry that you may not be happy with the finished product. Overall, you know what you are getting when you buy a home, and this cuts out some of the guesswork and anxiety for you.
- Buying a house is usually the less-expensive option. There are not as many hidden fees if you go this route, and unexpected expenses are less common.
- There is a significantly faster move-in time. While building means you are waiting around for months, maybe even a year, for your home to be ready, buying gives you a quick turnaround time. Homebuyers can be moved in and settled in less than two months in many cases.
- An already established neighborhood gives buyers more confidence. There are fewer surprises in school district information, and nearby shopping centers and stores are already in place.
- Mature landscaping is also a plus side to buying a home. Grass, flowerbeds, and other landscaping designs are already in place, and while you may want to make some changes, starting from scratch is probably not necessary.
- Already established homes are usually closer to the city center. Plots of land are not easy to find near developed areas, and buying a home will let you choose a place in more populated areas.
Disadvantages of Buying a Home
- It is hard to make upgrades on an already completed home. You may not get exactly what you want when it comes to the layout of the house, and changing an already established floor plan can be expensive and a lot of work. If you have a detailed layout already in mind, building a custom home may be a better option for you.
- Older homes may also be functionally obsolete. Building additional bathrooms and updating outdated kitchens are pricey projects. For these types of home improvement jobs, you often will need to hire a knowledgeable builder, which will add to the overall cost of the house.
- When you purchase an older home, you are getting all of the previous owner’s ideas of what their perfect home looks like. You will spend extra time and money on renovating floors, changing paint colors, or removing tacky wallpaper. Make sure you consider these costs when building your home budget.
- An old home has its set of quirks and peculiarities. It takes new owners time to figure out the kinks and fix each issue. Whether it is creaking floors, leaky pipes, or drafty windows, older homes often come complete with a list of necessary projects.
Home Buying Summary:
You may decide to skip the long process of home building and instead opt for buying a house in an already established neighborhood. This route probably has fewer surprises for the buyer and gives you better location choices when it comes to good school districts and convenient shopping areas. If you decide to buy, check out this list of tried and true home buying tips.
Making the Right Decision For Your Family
Figuring out whether buying or building a home is the right option for you is not easy, but carefully weighing the benefits and drawbacks will help you make the right choice. Whether you are buying or building a home, you will be investing a lot of time and money. This decision is all about weighing what is important to you and finding a custom solution to fit your needs.
Another way to evaluate whether to buy or build is to create a list of the things that are most important to you in a home. Know what things you are willing to negotiate on and what things make or break a deal. Simply putting these things into writing can help you solve your real estate problems. At Madison Homebuilders, our goal is to discuss thoroughly every element of the building process, to provide you with the home that you want, with no surprises along the way. Browse our house plans and contact us to get started.