Buying vs. Building: Which Option is Best for You?

When you’re looking to buy a home, there’s an almost endless list of factors to consider. One of the first things you’ll need to decide is whether you want to build your new home or purchase an existing home. Even with this single decision, there are a number of questions to weigh:  

  • Do you have specific needs for the type of home you want? 
  • How cost sensitive is your budget? 
  • Where are you looking to buy? 
  • How quickly do you need to be in your new home? 

Below, we’ll explore each of these questions so you can more easily determine the right choice for you! 

Do you have specific needs for the type of home you want?

If you are looking for a home that fits your needs exactly, building your home would be the best route to go. However, it’s important to take the difference in cost into consideration. What specifics are you looking for and is it possible for those to be found in an existing home? If your needed home customizations are niche and hard to find in an existing home, it might be more cost effective for you to build your home, rather than renovate an existing home.  

An example of a home feature that might you may consider compromising on because of cost would be the style of the home. Do you NEED your home to be a specific style? Maybe it’s been your lifelong dream to have a Victorian home in the suburbs, but is it worth the extra cost of building your own home? That’s something for you to decide.  

On the other hand, if you or a family member have disabilities that require customized doors, steps, flooring, rooms, etc, this would something that cannot be compromised on, and you may choose to build your own home to fit the needs of your loved one. In this case, building your own home may be more cost effective than completely renovating an existing home.  

How cost sensitive is your budget?

In the most general sense, buying an existing home is less expensive than designing and building your own home. According to the National Association of Home Builders, the median price of a new home in the United States was $301,400 in February of 2016, while the median price of an existing home was $212,300. Now, even with this data, the disparity in price may not be attributed to the fact that building your own home is innately more expensive than buying, but rather that those that do build their own homes tend to “go big”. This means, that if you’re willing to build your own home, generally cost shouldn’t be a major deciding factor for you. 

If your budget is the main thing that is determining your decision to buy or build, it’s likely safer to buy a pre-existing home. Remember though, this isn’t the case for everyone, so be sure to do extensive research based on your specific situation.  

Where are you looking to buy?

When you’re searching for your new home, where are you looking? Are you trying to remain within a major metropolitan area, or would you rather have a home out in the country? This preference may push you towards either buying or building your home.  

If you’re looking to live in a large city, the cost of buying a vacant lot and building your home could get extremely expensive. Lots in a large city will generally be much more expensive than a piece of larger land out in the countryside. In some major cities, the cost of just buying land could be comparable to purchasing an already-existing home.  

On the other hand, if you are looking to live in a rural area, the cost of land could be quite inexpensive, giving you a lot of budget room to build your dream home. If this is your scenario, however, you’ll want to be sure before buying a plot of land that there are already accessible utilities on site. The amount of money you could spend having utilities like electricity, water, and sewage piped to your home could exceed any savings from building in a rural area.  

If you’re looking for tips on purchasing a lot to build on, check out this blog post! 

How quickly do you need to be in your new home?

This may seem obvious, but it’s a big factor to consider. If you need to be in a new home quickly, even if you have specific customizations you may want for your home, it could be best for you to buy an existing home and renovate while you are already in the home. However, if you can wait about a year before getting into your new home, building could be for you. Generally, a Construction Loan allows a year for building. If you’ve decided that you are ready to talk about your options, either construction or purchase, request a consultation with us. 

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