Buying a home is something most people dream about. It’s an important milestone that represents financial stability and responsibility. But when the time comes, should you find a good real estate agent and go shopping for the perfect home? Or, should you express your own creativity and build your own custom house?
We find that it’s better to build a home than buying, but there are several considerations every home buyer should make first.
The Cost Varies Between Building and Buying
You may have heard that it’s cheaper to buy an existing home than to build one, but this isn’t quite true. There are many factors and though it can sometimes be more affordable to buy than to build, building is often the cheaper venture.
On average, it’s initially cheaper to purchase an existing home than to build. According to the National Association of Home Builders, the median cost of purchasing an existing home was $208,900 versus $282,800 for building.
The data very clearly states, however, that it depends on the target real estate market, discounts applied in the home building process and the demographics of your area. In many cases, the cost of building is comparable to buying, if not cheaper.
There are also certain discounts that can be applied for materials and contracts when you build your own home. You could save a few thousand dollars on the cost of building your home through material bundling, tax-deductible light fixtures, energy savings, and more.
The other important cost to consider is that of opportunity cost, which is officially defined as the loss of potential gain when another option is chosen. In the case of purchasing a new home rather than building, the opportunity cost could be many things, including:
- The loss of comfort when you choose a home that doesn’t have everything you want
- Higher utility bills from older equipment in an existing home that could cost you more in the long run
- Lower property values in ten years when you decide to sell the home
- Increased maintenance issues that could cost you more in repairs
When you consider these factors, building a new home is much more favorable, even though the initial investment can sometimes be more.
Building Gives You Exactly What You Want
One of the biggest disadvantages of purchasing a new home is that you’re more likely to get a home you don’t love. For example, you might not like the floor plan. You can make costly renovations, but oftentimes, you find yourself settling, which decreases life satisfaction.
Building gives you a flexibility that you don’t have when you buy a house. You’re able to make your dreams into a reality. You’ll have an ideal layout and the right amenities to make your stay more comfortable.
In particular, you’ll be able to add certain efficiencies that reduce your carbon footprint and your utility bills. The HVAC systems and appliances today are much better than they were 10 years ago, and you can build a home with these modern amenities included.
Building Can Take Longer
When you build a new home, know that it will take longer than purchasing an existing one. If everything goes smoothly, you can be in your new home in 30-45 days. On the other hand, building a home with a manufactured floor plan will take about five months, and a custom home will take about a year.
Though building a new home might not be ideal if you need to move right away, the year-long construction is often well worth the wait. Not only does it mean that you’re getting everything you hoped for in a new home, but it also gives you time to figure out your finances. You can make payments throughout the year and save more to get a lower interest rate on your mortgage.
You’ll also have more time to prepare for the move and sell your previous home. It can sometimes take months to close a real estate deal.
The Neighborhood Can Be Better if You Buy
In most situations, you’ll get a better idea of the neighborhood dynamic if you purchase an existing home. If you choose to build, it may not be an established neighborhood. If you buy, you’ll get a good look at crime rates, schools, homeowner’s associations, and other factors that can influence your quality of life.
If knowing the neighborhood beforehand is important to you, look for open property in a neighborhood that’s well established. These areas are hard to find, but if you’re flexible on location, you can often find a great neighborhood to build in.
Fewer Maintenance Issues When You Build
As mentioned previously, the opportunity cost is very important, and you have to consider what a home will cost you down the road. When you build new, you won’t have as many problems with plumbing, electrical, heating and cooling, foundation, windows, roofing, siding, and other serious structural repairs that could cost you thousands.
When you build a home from the ground up, everything is brand new. You won’t deal with baseboard heating from the 90s that’s both inefficient and dangerous or a leaky roof because the home is 20 years old. Everything will be in the best condition and will save you a lot in replacements and repairs over the next 10 to 20 years.
Building Brings You a Warranty
What’s more, building offers a warranty on construction and individual components. Most contractors offer a 100 percent money-back guarantee/repair on all structural issues for one year.
If you use Parker Built Homes to construct your home, you’ll get a 10-year warranty provided by Quality Builders Warranty and backed by Liberty Mutual.
Many individual components of the home will also have warranties. For example, siding usually has a full warranty for a year, and then a limited warranty for the life of the siding. If there’s a defect in the material that becomes apparent 10 years from the time the home was built, you may not have to pay for any of the repair costs.
Build Your New Home with Parker Built Homes
At Parker Built Homes, we believe that building a custom home is always the best option – you’ll get the very best value for your money.
You can design everything to your exact specifications with the most modern, efficient building practices. You’ll save money while experiencing the highest quality of life possible. For more information about how we can assist you in achieving your dream home, contact us today!