Should you buy a home or build one?
When looking to move into your next home, the decision to buy new construction or resale is a personal one. As with most things, both options have their pros and cons. It’s nice to be able to pick and choose your finishes, but it’s also nice to not have to wait for the house to be completed or be at the mercy of construction delays.
There are benefits and drawbacks to both options, and making the right decision for you comes down to your priorities. To help you make the choice, let’s take a look at where each option stands with regard to four key factors.
1 – Design and Flexibility
For obvious reasons, perhaps the biggest advantage of building your own home is the amount of input you have when it comes to its design and features. You’re more likely to get exactly what you want for layout, colours, flooring, cabinets and more, or at least select your preferences based on what customization options a development is offering.
On the other hand, with an existing house, what you see is what you get. You don’t get to make the initial decisions that influence how the house looks. While this means you may have to compromise on your idea of your dream home, it also means you won’t have to spend time choosing colours and styles that you aren’t sure will go together, or checking to make sure everything was done to your specifications.
It can take a lot of time and effort to manage the details and decisions when building a home from scratch, but for some buyers, this is an exciting, creative adventure!
2 – Environment and Neighbourhood
If your goal is to live in a specific neighbourhood, looking for a resale might be your best option. Plus, an existing home is likely in a more established area in terms of landscaping, access to transit, and infrastructure.
However, if you opt for a new build in an up-and-coming community, you will get to take advantage of newer roads and sidewalks, and potentially new schools and amenities. Keep in mind this could mean years of noise, dust, nails, and construction equipment going up and down the streets while the development is completed if it’s more than just your house being built.
Opting for a new development may also mean you won’t get the same variety as you would in an established neighbourhood, especially if all homes are being built with the same style guidelines. Keep in mind that this is not inherently a disadvantage if it’s not a priority for you.
3 – Timing and Availability
If you’re on a firm timeline to move in, purchasing an existing home may be your better option. It’s usually ready to be lived in, and you can move in once the sale is finalized. Data suggests that average real estate close times are 50 days – not exactly lightning-fast, but still faster than the 7-8 months it takes to build a house.
When it comes to new construction or new developments, the construction is scheduled with a completion date but it’s not uncommon to have your move-in date delayed. Your timeline is at the mercy of how fast the builders can get supplies and labour, and deal with any unforeseen circumstances (ie. natural disasters, human error).
However, if you need additional time anyway to find a new job or school, or simply aren’t in a rush to vacant your current residence, this can be no issue at all. Just remember that so long as the home is not yet built, things can change and you may be forced to make adjustments in terms of your timeline.
4 – Cost and Value
With all the advantages of purchasing a brand new home comes a higher price tag. According to research in 2014 from Trulia, new homes (built in 2013-2014) cost approximately 20% more than similar existing homes. This makes resale typically look like the cheaper option, plus you have more room for negotiation on price and terms of sale.
But aside from just the sticker price, there are extra elements to consider when comparing the prices of resale vs a new build that could end up making the two options more similar in eventual costs.
When comparing the price of your two options, here’s what to factor into your totals:
- Repairs: Because you don’t know exactly how a home has been maintained over its lifetime, there is an element of risk with purchasing a resale home. Depending on how old the house is, it’s understandable that a resale will require more maintenance and repairs than a new build, so this is an expense to factor into your decision. A new build won’t require as large of a budget for repairs since everything will be brand new, in working order, and even covered by a warranty.
- Renovations: When pricing out an existing home, it’s important to factor in the costs of renovations that you know you would want to make. For example, if you plan on completely remodelling the kitchen, adding a suite, knocking down a wall, etc, you’ll need to factor in these costs in addition to the sticker price.
- Energy efficiency: Newer homes are usually built with more modern technology and energy-efficient systems (ie. electrical, plumbing). These systems can be more complicated to change or update in an older home and could affect how much money you spend on gas/electricity etc.
- Existing value: Resale homes have many features and upgrades that have been added by the current owners. These could include appliances, extra shelving, towel bars, door stops, window coverings, blinds, curtain rods, crown moulding, wood trim on windows, central vac, garage door opener, shed, landscaping, extended patios, and more. Keep in mind that these would be added costs if you built your own home because it won’t have been occupied and maintained yet.
In short, there are money-saving perks and added expenses to consider for both home options, but it’s important to consider the attributes of your specific alternatives to know what fits your budget.
Which option is right for you?
Ultimately, the decision to build or buy a new home comes down to which factors are most important to the lifestyle you want to live.
While there’s something to be said for a brand-new home that was custom-made just for you, the location, cost, and availability may end up being more important for your decision. Start by evaluating what’s most important to you in terms of design, timeline, neighbourhood, and budget.
Whichever route you choose to go, working with an experienced professional can help you ensure the process goes smoothly. I’d be happy to answer any questions you have about making the right decision for your budget and goals.