The single largest investment many people make in their lifetime is investing in a home. Every situation is unique, with each buyer establishing a wish list that includes specific wants and needs, such as size, location or kitchen space. The average age of a first-time homebuyer is about 33, placing them right at the front-end of the Millennial generation. Their median income is $54,340, which is about the same as what first-time homebuyers made in the 1970s, when adjusted for inflation.
However, the first decision first-time buyers must make is a large one: should you build or buy your home?
While either choice has its advantages and disadvantages, there are several variables to consider while making this decision. Since Litz Real Estate has more than 40 years of experience in homebuilding and reselling homes, we wanted to share our thoughts on buying an existing home versus building a new home.
Buying an Existing Home
Cost and convenience are two of the driving factors in buying an existing home. Although first-time homebuyers have a long checklist of items to do before they complete the process of buying an existing home (such as viewing homes, making offers, inspecting homes, etc.), the whole process only takes about a month or two to complete. This makes it extremely convenient for many buyers who might only have a small timeframe to move, whether it be for a new job or for children starting a new school.
Buying an existing home also allows buyers to pick their desired neighborhood. This is considered a benefit when compared to building a new home, which tends to occur in areas that are removed from neighborhoods due to the scarcity of available land.
According to National Association of Home Builders, it’s often more cost-effective to purchase an existing home. Prices for existing homes may also be more favorable due to the housing crash of 2008, which is still felt across the nation.
Although there are several reasons why a first-time homebuyer should purchase an existing home, there are some disadvantages to this decision as well. Several people experience “buyer’s remorse,” which is frequently associated with the purchase of an expensive item such as a car or house. It may stem from the fear of making the wrong choice or guilt over extravagance. As time goes by, homeowners tend to discover quirks about the house that didn’t stand out when they were initially going through the home-buying process. Even if a homebuyer wants to make upgrades and updates, it can result in a major investment of time and money.
Building a Home
Building a home doesn’t offer nearly the same convienences as buying an existing one. The main downside to building a new home is starting from the ground up with an unpredictable move-in date.
For starters, finding land to build on can be just as difficult as picking out a home. Once a future homebuyer finds suitable land, all decisions on each minor detail have to be planned out with the builder. Homebuyers also need to consider water systems, like whether the land allows a homebuilder to access municipal water and sewage or requires a well and septic system, along with any other permits for the area.
Another drawback to building a house tends to be the higher costs and longer timeframe, both of which can increase throughout the process. However, with modifications home builders can make they can turn a vision into their dream home.
Most home builders enjoy having control over the total customization of their home and typically get exactly what they want with a little patience. New homebuyers have the chance to own all creative control that goes into building a home, as well as having brand new appliances and features throughout the house. These are two major benefits to building a home and creating something entirely new that fits the homebuyers’ style.
Looking for a new home or trying to sell your existing one? Building from the ground up or renovating from the top down? We’re happy to help answer any questions you may have. For any inquiries, look to Litz Real Estate for assistance. Contact our team here.