Buying an Existing Home vs. Building a New Home

Key Differences in Building vs Buying an Existing Home

• When buying an existing home, you will likely purchase more square footage.  This is due to the price per square foot difference between buying existing and building a new home.
• Would you be building a custom home (currently well over $600,000 or would you be buying an approve building plan in a subdivision?  Custom homes are definitely more expensive and take more time.
• Will you be buying land outside of the city limits for your potential build?  If not already in place, you may need to calculate costs for water, sewer, and running electricity to the build site.
• What will be your budget for upgrades?  Upgrades can accumulate very easily.  Some are better upgrades than others, and I can guide you through those decisions.
• Subsurface conditions will be a part of your contract.  If excavation of your build site reveals rock, it's USUALLY up to the buyer to cover the cost of removing the rock.
• The date of closing for new construction can vary depending on weather conditions, availability of contractors or materials, permits, and city and/or county inspections.

Of the greatest importance is to have a skilled buyer's agent to represent you during the build process.  Your buyer's agent will be your voice during the building process.  It's critical that a skilled buyer's agent to advocate and negotiate for you during this process in order to preserve the relationship with your builder and their crews.   

Buying an Existing Home

Advantages

1. Immediate Availability:  One of the biggest advantages of buying an existing home is the ability to move in right after closing, which is perfect for those needing a quick relocation.

2. Established Neighborhoods: Existing homes are usually located in well-established neighborhoods with mature landscaping, established schools, and other amenities.

3. Lower Upfront Costs: Generally, the initial costs of purchasing an existing home are lower compared to building a new one. The price per square foot is greatly different between existing homes vs new construction. This includes the price of the home, location,  property taxes, and insurance premiums.

4. Unique Architectural Features: Many existing homes come with unique architectural details and historical charm that newer homes might not have.  The more you customize new construction, the more the purchase price increases.

Disadvantages

1. Maintenance and Repairs: Older homes often require more maintenance and potential repairs, which can add up over time.

2. Limited Customization: When buying an existing home, your options for customization are limited unless you plan on investing in renovations.

3. Energy Efficiency: Older homes may not be as energy-efficient as new constructions, leading to higher utility bills.  To avoid those, homebuyers may need to add insulation, plant trees, replace windows, or install energy efficient appliances or HVAC units.

Building a New Home

Advantages

1. Complete Customization: Building a new home allows you to customize every aspect, from the floor plan to the finishes and features, to fit your specific needs and preferences.

2. Energy Efficiency: New homes are built with modern materials and technology, making them more energy-efficient and potentially reducing your utility bills.

3. Low Maintenance: With everything brand new and under warranty, you won't have to worry about major repairs or maintenance for several years.

4. Modern Amenities: New homes come with the latest amenities and smart home technology, offering a higher level of convenience and luxury.

Disadvantages

1. Higher Costs: Building a new home typically involves higher upfront costs due to construction expenses, lot prices, land acquisition, permits, and development fees.

2. Longer Wait Time: The construction process can take several months to over a year, depending on various factors like project complexity and weather conditions.

3. Unpredictable Challenges: Construction projects can encounter unforeseen challenges and delays, potentially increasing costs and extending the timeline.  Plans to customize the home can also increase purchase price.

Location

Urban vs. Rural: Land prices and building regulations can vary significantly depending on whether you're in an urban or rural area. Urban areas generally have higher land costs and stricter building codes, while rural areas may offer more affordable land and relaxed regulations.

Weather Conditions

Climate: Consider the climate of the area where you plan to build. Regions with extreme weather conditions may require specific construction techniques and materials to ensure durability and safety.

Conclusion

The choice between buying an existing home and building a new one depends on your personal preferences, financial situation, and long-term goals. If you need a home quickly, appreciate historical charm, and want to live in an established neighborhood, buying an existing home might be the best option for you. On the other hand, if you value customization, energy efficiency, and modern amenities, building a new home could be the right choice. Carefully consider the pros and cons of each option to make the best decision for your future home.