Whether you’re ready to own your first home or in the market to upgrade or downsize your current house, the dilemma between buying and building will at some point cross your mind and complicated it is!
Demands for homes are at an all-time high thanks to the increased population of potential homeowners born after 1980, and an increase in investment in real estate as a haven for savings in uncertain times.
As supply may not be keeping up with demand, many potential homeowners are weighing the pros and cons of building a new home as opposed to buying an already existing one.
Traditionally, building a new home meant higher costs, but depending on what and where you build, this may no longer be necessarily true.
Location Leads the List
Location will often have the leading role in determining how much a property will cost with cities and urban areas generally more expensive than suburbia due to an increase in land costs. Plus, with a market that has catered in the past to the construction of larger homes, single-family homes may prove not to be available that often.
Codes may be stricter today if building, but construction operations are better and more streamlined. Consideration of energy consumption connected to the heating or cooling and maintaining of an existing home depending on climate can also factor heavily.
So, it stands to reason that the current playing field between buying or building has leveled out considerably.
To Buy or Build?
Buying a home involves lots of choices. It’s not just a question of materials or the extra bathroom you want. Location, property taxes, and homeowners’ association costs will need to be figured into what your budget can allow for. You’ll need to determine exactly what you must have in a home, and what you would like but are willing to forgo if need be.
Regardless of whether you buy or build, there will be a set of advantages and disadvantages relative to either choice. Let’s examine both options and what they entail.
Purchasing an Existing Home
When buying an existing house, several advantages may make or break the deal. Two of the primary benefits are convenience if it doesn’t require major renovation and potentially the cost.
In April 2022, the median single-family home in Texas was $350,000. Austin ($530,000) and Dallas ($439,000) were the two most expensive cities to own a single-family home.
When you are ready to begin looking and have determined your budget, a real estate professional will do most of the leg work for you, by first finding various properties to consider and then aiding in negotiations and necessary documents.
So, while there is a lot to do, it still is faster than building and you may have the added convenience of being able to move in quickly. However, limited customization, landscaping, remodeling, renovations, upgrades, and updates all will have a price tag attached that needs to be factored in when making your choice.
Advantages of Purchasing an Existing Home
Convenience
If you are on a tight schedule due to relocation, buying an existing home may be your only option. This can also be an important consideration if you want to move near family or friends or place your children in a specific school. The convenience however will need to outweigh any dream of customization.
More Land
Sometimes older homes will feature larger lots of land with more room to accommodate a garage or pool.
Neighborhood Zoning and Landscaping
Zoning will be well-established in older neighborhoods and unlikely to change. You’ll find traditional landscaping and mature trees and vegetation. You may manage to avoid any lawn, shrub, or garden necessities completely. Older homes also tend to be closer to urban centers.
Time-Tested Construction
Depending on how old the property you are considering is, older constructions have stood the test of time, and many may feature characteristic décor handcrafted by tradesmen with an eye for detail.
Disadvantages of Purchasing an Existing Home
Appliances
If you need new kitchen and bathroom updates, this can prove to be expensive.
Customization
Buying an existing home means forgoing customization in the true sense. You may not find exactly what you wanted in terms of rooms, baths, or layout meaning you’ll have to compromise on a floor plan.
Electrical Safety
An older home may not comply with today’s safety standards for electrical wiring thus requiring a completely new system.
Health
Older homes often feature lead paint or asbestos, and they may be hiding termites or mold.
Insulation
If insulation is inefficient or inadequate, utility costs will run higher.
Insurance Costs
With an older home in Texas, insurance costs will be potentially higher.
Location and Cost
City locations for a vintage home can potentially up the price.
Maintenance
More maintenance is required. Depending on how old the house is, it’s probable that there will be a need to repair or replace something.
Pipes and Plumbing
If the home still has galvanized pipes instead of modern copper ones, they are prone to rust, so eventually, they will require replacement.
Smaller with Less Space
Garages, basements, attics, cabinets, and closets will tend to be smaller than today’s designs. You may find a home with several bedrooms but only one bathroom, or if entertaining is a priority, a small-sized kitchen may not suffice.
Building a New Home
Building your dream home will always be more satisfying than purchasing an existing house. The biggest risk is not staying on schedule and hidden costs as you move forward. When selecting a builder, make sure he has references.
Also check into a lump-sum contract, as this will place any budget overruns onto the builder instead of you. Before beginning, make sure that floor plans, designs, and accessories satisfy you. Changing your mind during construction can up prices considerably.
Cultivate a good relationship with your builder and maintain open communication. Work with your builder to reduce costs and maintain the building schedule. Opt not to accept open deadlines or you may never finish.
Advantages of Building a New Home
Appliances
Dishwashers, microwaves, refrigerators, and wine coolers are all standard in new constructions. You may also get networked wiring installed.
Building Codes
By building directly you’ll have a home that complies with up-to-date building code requirements.
Customization
You get exactly what you want.
Energy Efficiency
Newer appliances and better insulation translate into better energy efficiency and lower costs long term. Heating, cooling, and air filtration will be state of the art.
Expense
If you are not building a custom home, building your new house may end up costing less than a pre-existing home in the same area with a lower cost per square foot.
Health
If you need a home on one floor without stairs, building one will eliminate architectural barriers. You’ll also avoid all the hazards of older homes like mold, lead paint, or asbestos used in construction.
Insurance Costs
There may be some considerable savings on home insurance when you have state-of-the-art plumbing, electrical, building materials, and more. If you decide to build a mobile home, the insurance costs are significantly lower than other types of homes.
Maintenance
There will definitely be less. Major upgrades like a new roof or water heater will most likely not be needed for a decade or two.
Resale profit
You may make a nice profit if you need to sell, as newer homes are easier to sell and generally have greater appeal.
Technology
It doesn’t get any better if you want a smart home. You can select to install solar panels, wireless systems, security systems, and automation, and prepare for technology upgrades.
Disadvantages of Building a New Home
Convenience
There generally isn’t any convenience attached to building a new home. You’ll need to scout for land, commission an architect, and find a builder you trust.
Consider that every detail will be up to you and that will include troublesome areas like access to sewage and water lines or a well that requires digging and a septic tank. Permits and bureaucracy will also be a bother and sometimes very slow in coming.
Delays
Materials and appliances may still be playing catch-up with demand following the Covid pandemic. Any building delays will inevitably cost you more.
Distance
If you need to commute to an urban center, plan on more time on the road and higher transportation costs.
Expense
There’s less possibility to negotiate with a builder, so there will not be the same kind of margin as if you were negotiating for an existing home.
Any type of upgrade that you include along the way will push up costs, and don’t forget to budget in moving costs, landscaping, and any new furniture you may need. If you are building with the aid of loans, financing can also be costlier especially if you don’t have collateral.
Land Costs
The expense of the land to build on tends to run high.
Landscaping
Unless you are building in the wilderness, landscaping, and vegetation will need to be designed and installed.
Repeat Floor Plans
If you are looking for something unique, a choice of three or four floor plans with every house in the cul-de-sac resembling each other, won’t satisfy you.
Settling
Houses do settle on their foundations, especially new ones. This can cause cracks in walls, foundations, and door frames.
Stress
Building a home isn’t for the faint of heart. Managing a construction project from permits to budget to all of the details can send anyone to the hospital. Know what you are in for and keep your nerves steady.
Always Consult a Professional
When push comes to shove, you may need the convenience of buying a pre-existing home due to time limits or because you want to live in a specific location.
You may also like the charm of vintage houses with unique characteristics and appeal. However, the attraction of building a customized one-of-a-kind home may lead you to choose to build.
Whatever your final decision will be, look for experienced professionals in Texas with excellent reputations such as a reliable real estate agent to manage your search for an existing home or a well-referenced building contractor to build your perfect new home.