Buy a house or build a house? Any thoughts........Pros and cons....?

Question

My boyfriend and I are thinking about moving into soemthing bigger. We are trying to way our options. Should we sell our condo and buy another house or have one built? But we are not sure whtat the difference would be....which would be cheaper? Any suggestions and websites welcomed!!! Thanks!

Answer 1

This depends upon what the economy is doing. Right now, home prices are dropping. And, materials costs are rising. This makes buying a better deal TODAY than building. All the pros/cons listed in earlier posts are correct. But, in getting square footage for you money in the market as it stands right now, buying is the way to go.

Answer 2

Either way, whether you buy or build, there will be some home improvement costs. I thought when building a house, you wouldn't need to do as much, but I was wrong. Still, if you build, you can rest assured that you will be the first occupants of the house...that's a good thing. If you do decide to build, and before you settle on a builder, I would suggest visiting several communities and talking with people who live there to get their experiences with the builders. It's always good to get an honest opinion as opposed to the "opinions" of sales people.

ADD - Building is NOT always more expensive. There are many new housing communities where I live (Indy) and the prices are not that bad.

Answer 3

You need to decide what options you "have to have" and which ones you "want to have" and check out both existing and new. Pros's to New: everything has a warranty, no one else has lived in the home. Con's new neighborhood may not be built out meaning dust, dirt until the development is done. Existing homes Pros's: Mature trees, & shrubs, maybe rooms are larger, maybe more sq.ft. finished. By updating you could potentially see an quicker increase in equity. Con's may need updating, or repairs.

Answer 4

I would prefer to build my own house to my satisfaction, but that is extrmely costly and u might end up spending 3 times more doing it. If u can find a house that has what u are looking for and is what u want u may want to do that instead as that will be a little more cheaper for u and to be honest when u build a house u have to completly trust the carpenters and architect to make it they way u like it not the way they think u will like it.

Answer 5

Buying Pros:
-It's cheaper
-You don't have to have a rental house while it's getting built

Making Pros:
-Customized to what you want
-No fixing up to do

Buying Cons:
-You might have to fix it up a bit
-May not be EXACTLY what you want

Making Cons:
-More expensive
-Have to stay somewhere while it's getting built.

Good luck!! <33

Answer 6

Pros and Cons!

First you should consider several issues: your budget (this assumes you can be financed), your minimum criteria (what you must have in a house), and finally the availability of new homes in the area. For that matter, you'll have to decide on an area.

For myself, we look at minimum criteria to pick an aera--distinguised high school by state standards (distinguised high schools have distinguised junior highs, and distinguised elementary's nearby), within 5 miles of work, within 1/8 mile of a elementary school (child under 13); my child will attend, within 1 mile of a high school (high school child within 3 years), within 3 miles of a mall, and my favorite bonuses within 1/8-1/4 mile of a special feature like a water park, or something we like that's neat like a park, theater, etc.

Area is very very important and should be selected after a budget and confirmation of financing. As a budget is relatively fixed. I usually look under my spending limit by 30%, when we first start looking. Also, I only use conforming loans and recommend that you use a bank or credit union only (for reasons I won't get into here as you didn't ask).

Now that you have a budget, you can pick the area using your criteria. Your criteria will set up a number of possibilities, so pick the most important one... For us this is Distinguised HS for several reasons. For one, DHS's are usually in good areas, have distinguised lower schools, and are prime areas for people to move into, but you could use any single important measurable criteria you want.

Once you eliminate areas using your budget, and perhaps a review of the area itself for other criteria, you can go visit with a realtor. It's very important that you don't get excited and just start looking around in any homes.

Find a realtor, and consider what you are signing first, be sure to address a notation in any written agreement to define the area to be covered, I usually use a realtor per county or even city (so define it well), I set up an expiration date which can be 1 month to three months (be sure this is written), and also discuss new homes purchases and make a clause that the contract or agreement does not cover new home construction, except inventory homes. Get a copy. Also if you're going to look at new homes (if there are new homes in the areas you want to live in), then you'll need to get an agent experienced with new homes. Most agen't are not interested in new homes, and do not want to be involved. Just like foreclosure homes, you'll have to shop for the right agent carefully before signing anything, and discuss new home purchases for the area ahead of time.

Now you have a budget, criteria, an area, an agent...Now you can decide on buying preowned, buying new construction, or buidling new construction. Everything we discussed already goes into deciding whether what to buy (new, old etc). It all depends on what you can afford, where you're looking, and what you're looking for in a home.

My advice is to have your realtor show you homes in the areas you want with the criteria you set. Homes in an area tend to be built by pattern, so you'll quickly be able to say..."I don't like these kind of homes with this 'whatever' it is". You'll want to see two general kinds of homes: preowned, new construction neighborhoods, new construction builders. In new construction, each neighborhood has it's own criteria and each builder has their own style. You're budget will cut out those you can't afford to look at, and your criteria/location will help point to an available projects.

In new homes--money talks--hell, in any home money talks. So try to enter this with a pre-approved, fully funded loan, as much as possible. That's why you need to consider a lender ahead of time. You'll be able to negotiate any purchase based on your speed to buy. Which brings up a big issue--try to be in a position to buy now. Right away, before the 18th of the month, so usually within 2 weeks up to 1 month. You can't expect the date you own the house to match 100% with the date you move out of your old home, so try to build a budget to handle this double payment for X amount of time (normally one month), plus the cost of moving.

Now in picking a new home over an old home here is what to consider: New homes sales are different. The seller / builder will want to try and get you to finance, title, and insure with them or their partner. So that's why it's helpful to have you own everything when you walk in. If the new home is inventory, you might realize a savings by having a realtor in your corner, especially if there are other builders to choose from in the area and price range. I've seen 10-20-30% savings on inventory homes over build out prices.

New homes have some pluses: warranty features (and transferability clauses), customization, and even design customization. If you're budget allows, you can certainly have your dream home built new.

Pre-owned homes don't usually have warranty features but may come with a "Home warranty" that covers some of the houses equipment like water heater and ac for a year (not the same as a builders warranty package). Pre-owned homes tend to have more establishment, such as bigger trees, etc. Depending on the age of the neighborhood, some older neighborhoods may have settled older crowds with fewer children (this may be a plus or minus). But newer homes in springing communities tend to entice growing families, so more children (this may be a plus or min).

While new and older homes have issues (faulty, mechanical, maintenance), new homes are considered to be a bit more headache free in the sense of repairs. But new homes might need more spit and shine such as lawn design, planting flowers, painting, and setting up a new house.

In new homes its easier to have special provisions in new homes, such as a washer and drier, refrigerator, etc added in.

You asked which is cheaper--I'm not really sure...but areas with a lot of new homes can certainly move or stall a market place. Depending on the motivation of the seller, either could be cheaper. Pre-owned homes can be great buys if you can move in quick and the seller is already moved out. Also, pre-owned homes can be great buys if the seller wants to move on on a certain date in the future, and you can accomodate. If you consider buying the home then leasing back, "Buyer beware" and consult a lawyer first. Sellers like to do this to have cash flow but, buyers take on a lot of liability while potentially saving quite a bit. In a mortgage, 10% seems to disappear in cost savings. But, cash back at closing can be a good incentive to work with a seller.