Buying versus Building: The Age Old Real Estate Conundrum

If you are preparing to move in the coming months, you may be wondering whether it is best to purchase a home or to build a home from the ground up. While many home buyers view the option of custom home building as a luxury that is not attainable on a limited budget, it actually may be more affordable than you think. However, there are other factors that should be considered before you decide whether to invest in an existing home or to build a home.

buying a old home

A Word About Your Budget

While the home building and re-sale markets are closely linked, they are not the same. The fact is that some markets will have more affordable conditions in place to purchase an existing home versus to build a new home from the ground up. You should review both options carefully. Keep in mind that the quality of existing and custom homes can vary greatly, and the quality of the features and other factors may impact the home value considerably. When you make your comparison on prices, ensure that you are making an apples-to-apples comparison based on location, quality and other factors.

Repairs and Maintenance

When you purchase an existing home, it may be well-maintained and in like-new condition. Some homeowners may have taken steps to keep their property in pristine shape and may have made beautiful upgrades. However, with some existing homes, a buyer will be taking on the previous homeowner’s chores that he or she has put off. An older home may be more likely to need new roofing or roofing repairs, a water heater or HVAC replacement and more. With a new property, there is always a risk that repair work will be needed right away, but the risks are reduced because the features are all brand new.

The Location Where You Want to Live

In some cases, building a new home in the desired location is not an option due to the amount of development or the scarcity of land in the area. Generally, the closer you to get to desired locations, such as the downtown area in metropolitan areas, beaches in coastal areas and more, the cost of vacant land increases. The value of existing homes also increases, but you may be able to find a fixer-upper or foreclosure in a desirable area that is affordable when vacant land is not.

The Features and Amenities

Some homeowners want to live in a modern home with state-of-the-art appliances and contemporary décor, but others may prefer to live in an established neighborhood or even on an estate with a touch of history tied to it. The features and amenities in the home should be ideal for your functional needs first. Then, consider the style of the home, its features and layout. Keep in mind that if you cannot find the right home with the preferred features and amenities, building a home may be the only option available.

The Time Factor

When you pay for an existing home outright with cash, it is possible for a closing to take place within about a week or so. When you apply for financing on an existing home, it may take 30 days or longer to close on your home. The time to build a new home from the ground up may take considerably longer. This is because you must work with a designer or architect, select your land, find a contractor and more. If you are not under a time crunch, building may be an option. However, if you are under a time constraint to move quickly, buying an existing home or renting until your new construction home is completed may be more feasible.

Different Sources of Stress

You may also consider the different sources of stress related to a new home purchase. When you purchase an existing home, you may feel stressed about whether your offer will be approved, whether your loan request will be approved and about closing within a specified time frame. You know all about the house and can walk through it, so you know exactly what you will be getting. When you build a new home, you may be able to make design selections based on your taste and select the perfect lot. However, you may feel stressed about the end results, the quality of workmanship and construction delays.

Whether building a new home or moving into an existing home, it is possible to move into the perfect house for your budget and needs. However, think about each of these factors to make a decision that is suitable for you.

Information provided by United Roofing, a Calgary roofing contractor.

Erin Emanuel