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New Homes: Buying vs. Building

Apr 20, 2015

The homebuying process is an exciting time. As you start your home search, you may begin to wonder if it’s worth building rather than buying a new house. There are pros and cons to both, and it’s important to consider the differences before making your decision to buy or build.

According to the National Association of Home Builders, as of February 2015, the median price of a new home is $275,500, while the median price of an existing home is $204,200. With rising prices and low mortgage rates, now may be the time for buyers to make a deal on a new or pre-existing home. Which is the better investment? 

Building a new home can come with many benefits. If you work directly with a builder, you can usually negotiate for a great discount and determine the location of your property with a little more freedom. Everything is brand-spanking new, so there is no need to budget for upgrades or repairs. Possibly the biggest benefit is having the control to design your home from scratch and have everything just the way you want it.

However, not everything is perfect when you decide to build a home. There will be delays and things that go wrong, no matter how much you plan and prepare. It’s important to consider a realistic timeline: it can take anywhere from four to six months to build a home – sometimes longer. You may also have limitations regarding the style of home you can build, depending on your budget. Making a lot of changes and purchasing upgrades from the builder can be very expensive. Understand that you may be required to carry the construction loan on the building process if the builder doesn’t agree to do this for you. Check out the permit requirements in your neighborhood and ensure everything is being built up to code. There are a number of other things to consider when building a home, including legal agreements, temporary housing, and of course the added stress of moving.

Buying a pre-existing home is usually a more attractive option for many people. Usually, you can move into the home right after closing. “Move-in ready” homes usually have upgrades, window treatments, and nice landscaping, all of which are basically “inherited” in the sale. This can add up to big savings for the buyer. There are a number of other benefits to buying a pre-existing home: upfront costs are generally much lower, you can move in almost immediately, and you can easily visualize your floor plan and furniture layout.

The choice between buying vs. building a home can be tough and really depends on what options are available. There are pros and cons to both, and it can be a difficult decision. Work with a Realtor to make a list of features that are important to you, and compare costs. Know your “must haves” and “live-withouts” and work around your ideal price range.

For more information on buying a home versus building a home, contact the experienced real estate agents at Hilton Head Island Real Estate Brokers. Call 843-785-8006 or fill out our contact form now!