To Build or To Buy: The Real Estate Dilemma
Do we build? Or do we buy? That is the question! But what is the answer?
If you have more than a casual interest in the real estate market right now, you may have wondered whether buying is the right thing after all. Why buy a home when you could spend a little more and get exactly what you’re looking for?
The existing real estate market might not be able to offer you the dream home you’ve always envisioned. But is building a house really worth it?
The short answer? It depends. If you’re looking for the long answer, let’s dig into the pros and cons of custom building versus buying a home. Both choices have different associated costs—it becomes a matter of what matters most to you. In either case, there is a balance of time, effort, and money spent.
Buying a Home: Pros and Cons
- Convenience. Although you will have to spend time shopping for the right home, securing financing, making an offer, having it inspected, and closing the sale, this process still tends to be faster and less involved than building a home from scratch.
- Already established. Existing homes tend to be found in established neighborhoods. They are often closer to city centers and usually have mature trees and landscaping. It’s much less common to find an empty plot of land in an established neighborhood or near a desirable school district.
- Unpredictable market. You have to work with what’s currently on offer and might end up compromising on features, location, neighborhood, or price.
- In need of TLC. Many existing homes are not in ideal condition and may need extra care or renovations to make them work for you. While the initial cost of buying a home might be less than building one, you’ll also want to factor in the price of future work, like repairs and cosmetic updates.
New Build: Pros and Cons
- Customization. Building a home from scratch means the finished product is 100 percent customizable. You will get exactly what you want, where and how you want it.
- Health and safety. A brand new house can actually benefit your wellbeing. Old houses are more likely to be built with toxic materials like asbestos or lead paint, and aging homes are more prone to mold. With a new home, you know you’re getting all the best materials, and everything will be built to today’s standards.
- Labor intensive. Maybe you’re not building the house yourself, but you still have to find the right plot of land, the right neighborhood, the right architect, and the right contracting team. You’re also responsible for making all the building and stylistic choices for the new home, and while some folks love this, many find it a burden and highly stressful.
- Time-consuming. You’re building a house from scratch, and that takes time. On average, a stick-built home can take anywhere from seven to 13 months to erect, assuming that everything goes to plan and you’re building on a fresh plot. That’s a long time to wait!
- Expensive. Of course, it’s not cheap to buy a home either, but there is a laundry list of expenses associated with building new. You’ll need to buy a plot of land, procure permits, get inspections, pay various professional’s fees, and purchase building materials. The National Association of Home Builders estimates that the median price of building a single-family home is around $103 per square foot, and much higher in popular areas.
As you can see, there’s no clear-cut answer about whether you should build or buy. It all comes down to individual preference, budget, and timelines. New home builders and those who choose to buy are simply looking for the perfect home. What makes a home perfect? Well, that’s up to you.