When someone decides it’s time to buy a home, they also need to decide whether it will be a new build or an existing home. Benefits and problems arise from either choice. Knowing a lot of information about both can help a potential buyer understand what is best for him or her.
Kyle Hiscock, Pittsford, N.Y., real estate agent at Re/Max Realty Group, says there are definitely pros and cons to both building a new home and buying an existing home.
“While deciding whether to build a new home or to buy an existing home, you should ask yourself a few very important questions,” he said.
- Do you need to have a home that you can fully customize?
- Does owning an older home that may have more problems than a new construction home matter to you?
- Do you like traditional home features such as natural woodwork?
- What are the current costs to build a home versus buying an existing home that’s similar?
“When buying a home or building a new home, there are some extremely important elements you need to consider,” Hiscock adds. “First and foremost, you need to know how much you can afford to spend on a home, whether it’s new construction or an existing home.”
Once you’ve found out how much you can afford, you need to strongly consider the cost of maintenance of the home you’ll be buying. If you’re buying a new construction home, it’s likely the property is going to have a lower cost of maintenance. On the other hand, in most real estate markets, you can purchase a larger existing home than you could build for the same price, he said.
How much does building a new home more than buying an existing home? When building a new home there are many costs associated with the process that many buyers don’t realize, Hiscock says. A few of the most common costs to building a home include labor costs, site development and excavation costs, and costs for any upgrades in a new construction home.
“Building a new home is more expensive than buying an existing home, in most cases. Certainly if you purchase a 3,500 square foot updated home built in 1950 and build a 1,500 square foot basic home with no upgrades or amenities, there is a good chance that the existing home will cost more,” he explains.
Click to check current mortgage rates.
The top benefits of new construction:
Customization
“Arguably the biggest benefit of building a new home is the ability to customize it to your exact needs and wants. When building a new home, you’re able to customize every square inch, finish, and upgrade you want,” he says.
Less Maintenance
When building a home, it’s brand new and hasn’t been lived in. This means that you’re going to have less maintenance than an existing home. The roof, the windows, the furnace and the air conditioning….everything is new.
Efficiency
A brand new home is likely going to be more energy efficient than a home built in 1990. This is extremely important for some home buyers. A more efficient home will have lower utility costs amongst other things, Hiscock adds.
The top benefits of buying an existing home:
Cost
In the majority of cases, buying an existing home is going to be less expensive than building a brand new home. If you’re working on a tight budget, buying an existing home will give you more for your money.
Easier
Building a home can be quite a process, he states. “There are many steps to building a new home from customizing a blueprint to selecting finishes and upgrades. Buying an existing home is simple. What you see is what you get.”
Quality
In some cases, newly constructed homes have inferior quality to existing homes. Many times, a home built in 1950 will be a higher quality built home than one nowadays. This is particularly true if the home has been updated.
Before deciding on which type of home you desire, go take some tours of different homes during open houses. Developers many times have open houses for their new subdivisions. You can get a feel for the type of customizations you can add. Also, take in some open houses of existing homes in different neighborhoods to understand the styles available such as ranch, Cape Cod, Victorian and more. You’ll get a better idea of what your preferences are when you see staged or ready-for-sale homes.
According to NOLO, a consumer-friendly website about law, encourages people to choose the developer first, then pick your house if building a new home. A responsible builder knows they have a reputation to protect and must construct houses that live up to promises. Talk with real estate agents about certain builders, and ask questions of homeowners who have used the same home builder.
