You know you’re ready for a new home, but should you buy it or build it? This is the first of many important decisions you’ll make during your home-buying journey. As with anything, there are pros and cons to consider as you make this important decision. I’m breaking down the pros and cons of new construction, so you can confidently decide if building a home is right for you. Let’s start with the pros:
1. MATERIAL AND STRUCTURAL WARRANTY
Many builders offer one-year material warranties, which means they’ll accept responsibility for some material defects and will come in and fix them at no cost to you. Sweet! Many builders also offer a 10-year structural warranty, where they guarantee the stability and function of the structure and foundation. As you visit different builders, be sure to discuss their warranty policies before making any decisions. It can be a game-changer! Plus, any appliances included in your home (furnace, water heater, central air system, and any kitchen appliances) will likely be covered for several years under manufacturers’ warranties.
2.NO BIDDING WAR
Look, it’s a jungle out there. Building a home can be a much simpler, stress-free solution for buyers experiencing house-hunting woes posed by fierce competition. It’s also a great solution for buyers in a seller’s market environment (when the number of buyers is more than the number of homes on the market).
This is a biggie. Many home buyers go the new construction route because they can get exactly what they want. When building a house from the ground up, you’ll get to personalize the details of your house – both exterior and interior. From the placement of light sconces and outlets to paint color and cabinet style, you call the shots! And sometimes, you’ll even get to choose your lot. After all, you know how you like to live better than anyone.
4. NOBODY HAS LIVED IN THE HOME
There's something to be said about moving into a home that nobody has lived in before. No one has stepped foot (or paws) on your carpet, and no time has passed for anything to break or go wrong. Deferred maintenance? Forget about it!
5. ENERGY EFFICIENCY
New builds are often built with more energy-efficient technology, like high-efficiency appliances, insulation, and air sealing. You could end up saving tons on energy bills! Plus, new builds are better for you – literally! New homes are less likely to have health concerns or toxic materials that older homes might have – you won’t have to worry too much about asbestos, lead paint, mold, and other nasty toxins.
Now, let’s look at the other side of the build or buy conundrum:
1. LESS NEGOTIATING POWER
Negotiation is a tricky business in real estate, and even more so when purchasing new construction. Builders are reluctant to lower the base prices on homes because it will alter the comps of the development and have every other buyer looking for the same discount. They may, however, offer some design center discounts or financial incentives, so look for those instead! This is where having your own real estate agent is especially important. An experienced agent knows the advantages and disadvantages of working with different builders and brings a creative mind to the negotiation table.
The construction process is highly dependent on many components outside your – or the builder’s – control. Mother Nature, labor availability, and the supply chain may dictate your closing date more than any part of the contract.
3. ALL BUILDERS ARE NOT CREATED EQUAL
How do you spot a reputable home builder? References. Reputation. Years in Business. Be sure to do your research and always get an independent inspection. It’s a couple of hundred dollar investment, and let me tell ya, it’s well worth the cost!
4. OPTIONS ARE SOMETIMES LIMITED
Customization only goes so far; there’s a good chance you’ll have to choose between a limited number of finishes presented by the builder.
5. UPGRADES ARE EXPENSIVE
Unexpected out-of-pocket expenses have a way of sneaking up on home buyers. Be prepared to shell out additional money if you want to upgrade your lot or finishes because the base price that’s listed on the signs typically does not include optional add-ons like a fireplace or an extra bedroom. Pro tip! Ask about landscaping and fencing. Unfinished landscaping or fencing will have to be finished at your own cost, which is definitely not cheap.
6. FURTHER FROM THE CITY CENTER
Developers often build new suburban developments on open land, removed from city centers. Think about how long it might take to run to the grocery store or hit your favorite coffee shop.
Here’s the bottom line: It pays to take the time to consider all of these factors before jumping into your home-buying journey. Whether building from scratch or buying a previously-loved home, the best decision you can make is an informed one. You got this!