NEW or PRE-EXISTING? BUILD OR BUY? How do you decide?
If you are weighing the benefits of buying a new house or building a new house or purchasing a pre-owned home vs. purchasing a new home, the best thing to do may be to let the Veenstra Team know of your interest. In this lesson we will help you think through some of the pros and cons between buying/building a new house or buying a pre-existing home. Whatever you decide, remember that it makes sense to have a buyer agent represent YOUR interests and negotiate on YOUR behalf….even if you are building a new home with a custom builder.
We have built a convenient search for lots and vacant land, so you can easily and quickly get a feel for the various options. You can also sign up to have new lots and land listings that come on the market delivered to your email.
We can save you lots of time in your new home search.
We are aware of a number of different subdivisions, that offer you the opportunity to build a new home within a reasonable budget. We would be happy to give you all the details for the options. Many of these communities offer pre-built new homes AND/OR the opportunity to build your own home. Often you still have the opportunity to make decorating selections even if the home is already in some stage of being built.
New Home Community A (Kalamazoo, $186,900 – $266,900)
New Home Community B (Portage, $144,900 – $177,900)
New Home Community C (Mattawan, $130,900 – $181,900)
New Home Community D (Kalamazoo, $139,900 – $180,900)
New Home Community E (Galesburg, $114,900 – $176,900)
New Home Community F (Vicksburg, $103,900 – $168,900)
New Home Community G (Kalamazoo, $99,900 – $150,900)
New Home Community H (Allegan, $117,900 – $167,900)
New Home Community I (Richland, $119,900 – $177,900)
New Home Community J (Battle Creek, $147,900 – $224,900)
New Home Community K (Portage, $154,900 – $183,900)
New Home Community L (Kalamazoo, $185,900 – $266,900)
New Home Community M (Three Rivers, $118,900 – $164,900)
New Home Community N (Kalamazoo, $119,900 – $177,900)
New Home Community O (Kalamazoo, $114,900 – $178,900)
New Home Community P (Kalamazoo, $116,900 – $180,900)
New Home Community R (Battle Creek, $105,900 – $144,900)
New Home Community S (Kalamazoo, $119,900 – $180,900)
New Home Community T (Kalamazoo, $129,900 – $185,900)
New Home Community U (Kalamazoo, $128,900 – $187,900)
New Home Community V (Mattawan, $174,900 – $208,900)
New Home Community W (Paw Paw, $124,900 – $182,900)
Some pros and cons of buying vs building a new home
Building versus buying is a major dilemma in the new home market. The freedom to make decisions about the details of your home and watch it take shape holds undeniable appeal. But there’s also something to be said for the security of comparison shopping, walking through a house and “kicking the tires” before you sign on the dotted line.
When it comes to buying a new home versus building a new home, is one option really better than the other? Not necessarily. It all comes down to preference. Only you can decide which option will work better for you. To help you decide whether you should build or buy your new home, use this handy guide outlining the pros and cons of both choices.
Building a new home
When you build a new home, you’ll work with a builder to create a custom home that has all the features you want. Depending on your budget, you can customize every aspect of your new home down to a T or you can choose from a range of already-existing floor plans and features. The home building process can take as little as a few months or many as a few years.
Home building pros:
- Control: Building a home lets you have control over all the features and options that will affect you on a daily basis.
- Knowledge: As you monitor the construction process, you’ll learn useful things about home construction and gain a sense of ownership that can only come from watching your house take shape step by step.
- Expert advice: You’ll have the expertise of the builder, contractors, and an architect to guide you. Have peace of mind knowing that the pros are thinking about code, permits, and energy efficiency — not you.
- The eco-friendly edge: You have the option of using environmentally sound materials and energy-saving features that will both make your conscience feel good and keep more cash in your wallet over the years.
Home building cons:
Cost overruns: You could have to pay extra for unexpected expenses. Unexpected costs can occur in any home construction project.
Time: Waiting for construction to finish can be disheartening, not to mention that having to come up with alternate living arrangements while you wait can be costly.
Stress: Every time a decision has to be made or a problem arises, you’ll hear about it. Dealing with those considerations on a daily basis throughout the home building process can take their toll unless you’ve got a positive mental attitude.
Buying a new homeBuying a new home involves scouring real estate listings with an agent to find a home that suits your needs. The process can take a few days or a few months, depending on how fast you want to move.
Home buying pros:
- Shopping around: You get to be a critical shopper, comparing different features until you find exactly the right combination at the right price.
- Bargaining: You can drive a tough bargain and get the best deal possible, knowing that, in a competitive market, there are other options waiting for you right up the road.
- Taking your time: When buying a new home, you get to work at your own pace. You can take your time house hunting. And when it comes to moving in, you work with the seller to choose a date that’s soon or a few months away.
Home buying cons:
- Concessions: When buying a home, you may have to make concessions in regard to features you want. You may not find the “perfect” house since you didn’t design it yourself. And you may need to spend money making updates or repairs.
- Stress: Finding and making an offer on a new home can be stressful, especially if you are in a seller’s market. You may need to act fast or make an offer that’s more than the listing price if you get stuck in a bidding war.
In the end, buying a new home and building a new home both involve some headaches. But if you’ve done your research and planned carefully, the end result is sure to be rewarding no matter which option you choose.
Things to consider when you decide whether to buy/build a new home or buy a pre-owned home
Although the decision depends primarily on personal tastes and needs, there are pros and cons to each option. Hopefully the list of the following criteria will help you consider which choice works best for you.
- Purchase price. Buying a home is the single largest investment most Americans make. Pre-existing homes almost always fare better in this category.
- Negotiating room. The advantage here usually goes to buying a pre-owned home. Individual sellers are typically more flexible than a builder. In recent years, however builders have left more room for negotiating as they are more motivated to sell homes. The Veenstra Team can help a great deal in this area. When we represent the home buyer as a buyer’s agent, you get the advantage of our negotiating expertise.
- Financing options. This is often a simpler process for pre-existing homes, which have the benefit of traditional financing: fixed- or adjustable-rate mortgages with 15-, 30-year terms. If you choose to build a custom home, you have two primary financing options. You can find a lender for a construction loan–a short-term loan, usually less than 12 months–and then convert to a mortgage once the home is completed or choose a construction-to-permanent loan, which combines the steps. Some builders may have their own financing available for an added premium. Some of the loans available through some production builders are similar to pre-existing home options.
- Energy efficiency. New homes win here except in very rare circumstances. They are generally built with energy efficiency in mind, including better insulation and energy-conserving appliances. These selling points can save up to 30% on annual utility bills. Existing homes usually do not have the benefit of new green technology and frequently have higher utility bills. You must be able to compare the costs here over multi years. Remember too, that adding insulation and weatherproofing an older home also can make a huge impact on a pre-existing home.
- Maintenance and safety. Maintenance can be a large financial drain and a huge stress to homeowners. In this area, you can’t beat a newly constructed home. New homes typically shine here because they are not only in excellent condition but also commonly come with some sort of insurance/warranty. In addition, these homes are built to comply with newer, stricter safety requirements than older homes, including improved resistance to fires and earthquakes. Home warranties can also be purchased for pre-existing homes, however the warranties are not typically comparable.
- Time. Time is a large factor in the decision to build or buy, and if you do not have time, building may not be for you. It takes 30 to 60 days on average to close on a pre-existing home once selected. By comparison, construction on a home takes from three months to more than a year.
- Customization. The ability to create a customized home has proven to have lots of appeal. It’s no doubt easier to have a house meet your exacting specifications if you build it from the ground up. But be sure you account for costs as well. You may be able to fine-tune an existing home for less than the price of building.
- Character Despite the advantages of being able to customize to your specifications, new homes will not be able to duplicate the character of existing homes unless you are ready to pay a premium. In addition to having unique architectural details, older structures are often constructed better and possess higher quality features such as solid doors and cinderblock foundations.
- Landscaping – New homes often come without any landscaping. Mature landscaping is also a bonus; buyers will not have to wait 20 years for their trees to grow large enough to provide shade and privacy.
- Amenities. Pre-existing homes have the benefits of established neighborhoods, including schools, shopping, and entertainment–all within reach. In the beginning phases of subdivision construction there may be limited neighborhood amenities. Be sure to consider how much construction noise and dust will impact your living situation as well when you make your decision.
NEXT LESSON: What is the Difference between Kalamazoo Custom Builders and Production Builders