Is It Better to Buy or Build a New House?

Get Conversational
By Get Conversational August 12, 2014 18:53

Is It Better to Buy or Build a New House?

As all the house hunting shows will tell you over and over again, no home will have everything on your wishlist. Because of that, some people shun the move-in-ready home and look into fixer-uppers at a cheaper price that they can make their own and attempt to get closer to their perfect house. But what about building a house from scratch? When is that a better option than buying a home, whether fully updated or needing a bit of work?

According to the National Association of Home Builders (NAHB), the average cost of building a new single-family home in 2009 totaled $377,624. Conversely, the US Census reports that the average sales price of a new single-family home in 2011 came to $267,900. So from that basic standpoint, it would seem building your home isn’t a cost savings solution. The reason for that could be two-fold:

1. Building your own house is mostly an upper-income form of housing. Only those with the means already in hand usually undertake such a project. Because the demographics of home-builders are skewed towards the upper-middle class, it’s not surprising that home costs are greater. In short, it costs more to build because those that choose to build can afford to pay more. It’s also easier for people who already have the means to make decisions to go with an upgrade here, an upgrade there, which quickly adds up to a much more expensive and upscale home.

2. When building a home, construction costs can quickly spiral out of control. There are so many moving parts with a handful of contractors and all their specialties and one of them eventually  discovers a problem that messes someone else up and before you know it, you’re weeks behind schedule and tens of thousands of dollars over budget. Outside of new home construction in planned communities that allow for limited customization and thus usually have more tightly control costs, building a home from the ground up never goes according to plan.

When deciding whether to build or buy, ask yourself these questions:

  • Do I have the means to afford not only my builder’s initial estimate, but at least $50,000 over that?
  • How important is customization to me?
  • Can I see myself living in a home someone else has already lived in?
  • How close to my complete wishlist can I get buying a pre existing home? This means location, size, price, style, amenities, and even the overall “feel” of the home.

If you’re someone who doesn’t want to deal with construction and renovation, obviously building a home isn’t for you. If you’re someone who values controlling every last detail and having something unique, then building a home could be the way to go. Just make sure whichever route you choose, especially if you choose to build your home, you understand the pros and cons of each situation before you commit to anything.


Photo Credit:
Photo Dean via photopin cc

Get Conversational
By Get Conversational August 12, 2014 18:53
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