There’s nothing like stepping into the fresh, clean simplicity of a newly constructed home. Then again, it’s tough to replicate the ambiance of a well-loved classic home on the corner of an old tree-lined neighborhood.
Knowing whether to build or buy a home can be a tough call, and it could end up being a simple matter of personal preference. That said, there are a few basic factors to take into consideration before making the ultimate decision.
While you might love the idea of new construction, you could have a hard time finding a building lot or neighborhood you love. After all, there are only so many “prime” locations in your area, and those were likely snatched up decades ago. If you’re building in a new subdivision, it could be years before your neighborhood has that mature, landscaped, lived-in feel.
If a home theater with a built-in snack bar is a non-negotiable point for you, you may be better off building a custom home rather than buying one off the resale market. That said, purchasing new construction doesn’t necessarily give you license to build three turrets and a drawbridge. If you’re building a home in a new development or subdivision, chances are you’ll have just a few floor plans to choose from with minor upgrades or customizations available.
If you’re looking to score a deal on a home and you don’t know how to lay sheet rock, well, you might opt for purchasing a resale home. According to the National Association of Home Builders, the national median new home price in April 2015 was $297,000, while the median price for an existing home was $221,000. Additionally, when you build a new home, you’ll have to take into consideration additional expenses like landscaping and the cost of new appliances before you even move in. Buying an existing home allows you to make upgrades and updates as your budget affords.
Maintenance and efficiency
While that new home may cost more upfront, it will likely save you money on utilities and maintenance for years to come. According to Fox Business, buyers of new homes likely won’t fork over money for major repairs for at least 10 years, and if they do, many builders include a warranty that may cover the repair. When you purchase new construction, you’re also purchasing up-to-date systems and appliances, which are much more energy efficient than dated counterparts. And since the home is optimally insulated and sealed, you could save on utilities for years to come.
While you can purchase a newly constructed home “off the shelf,” custom homes take time — and sometimes a lot of it. According to The Wall Street Journal, the average home built in 2015 will take six months from the time the builder obtains a permit to completion. This can put buyers in a tough spot, especially if they are selling their current home to fund the new construction. Many buyers of new homes end up renting in the interim, requiring them to move twice within a short time.
While the decision to buy or build may not be cut and dry, the prospect of home ownership is exciting. Making the right choice now means enjoying your decision for years to come.
Flint Stephens has a master's degree in communication. He writes regularly on business, financial and medical topics.