Choosing to buy a home is a big decision. Once you make that choice, sit down with your partner and make a list of your non-negotiables, as well as a list of things you want, but don’t necessarily need. Once you decide on the style of home you want, you get to choose whether you want a preexisting house versus creating your own.
Compare the cost of your home to its functionality. Is it cheaper to build a house from the foundation up or buy an existing house? You have to compare cost, maintenance, energy efficiency, landscaping, and the possibility of increasing your home’s value.
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Grab a pen and paper, and we’ll show you a few of the differences in building or buying.
On average, building a new house will cost you at least $50,000 more than an existing one. With that price, you get the house of your dreams, and as long as you stay within your decided budget, then you’ll be off to a great start.
Building a home from the ground up is a good idea for several reasons. You know what is happening with your home, from the inside out, and you get to decide on everything that goes into your house, from the tile to the bathroom fixtures, as well as the trim and windows. You get a sense of ownership as you watch your house grow from skeleton walls to home.
If making that many choices cause you stress, then an existing home is what you need. You don’t have to work with a blank canvas, so you can make the changes you want to an already existing layout.
Some negatives of that choice involve paying for items you don’t necessarily want or like. If the previous owner replaced the kitchen countertops before selling the house, even if you don’t love them, you’re not going to rip them out and replace them, because you paid for the price of the countertops with the purchase of the home. You end up dealing with the countertops because it’s too expensive not to.
Buying an existing home requires maintenance and upkeep. When you purchase your new home, make sure you know how old specific items are. Furnaces have an average lifespan of 20 years and cost near $4,000 to replace. Shingle roofs last about 25 years and cost close to $5,000 to replace. Also, know the age of your HVAC system. They live for at least 15 years and cost more than $5,000 to replace.
With a new home, you start out knowing the value of your big-ticket items. Some contractors will give a ten-year warranty on the house because they understand the importance of it as well. That gives you ten years of no extra maintenance costs on your home, hopefully saving some of the extra money it cost to build the house in the first place.
Having an existing home means you also get existing landscaping. Landscaping may not be part of your non-negotiables, but maybe it should be. Having mature trees on your property can add over ten thousand dollars to your property’s value and cut your air conditioning cost in half.
Building a home sometimes means you are purchasing undeveloped land. That is not always the case, but undeveloped land involves clearing trees and bushes and filling in soil with grass seed. It can cost over $3,000 to get the type of yard you want, and some trees require hundreds of dollars and only grow two to three feet each year. If you like the idea of undeveloped land, building a house is a perfect solution that will save you money in the end.
Older houses are less energy efficient. That means you’ll be using more power for air conditioning and heating than you would in a new home. More power means spending more money. You can reseal windows and doors, add insulation to the attic, and install an automatic thermostat to combat your bills, but you might always be playing catch up.
With houses built after 2000, energy costs are 21% less than older homes. A few dollars extra a month may not seem like a lot of money, but add that up over ten years and combine it with the cost of sealing and insulating, and the final price takes its toll on your checkbook.
Existing homes are already in existing neighborhoods. You can research the value of the area and see whether the value of your home is likely to rise or fall. Even if you purchase the worst house in the most beautiful neighborhood, you can fix your house up and add equity.
New houses built in new neighborhoods and are a toss-up. There isn’t enough data on the area to know whether property value will rise or fall, so you’re taking a chance that will hopefully end in your favor.
What it comes down to is money now or money later. With an existing home, you save money on the initial purchase but may spend more updating your home. Your property has more value with existing landscaping, and you know the value of your neighborhood and whether it is likely to go up or down.
A new home will cost more up front, but you’ll save on energy costs and have the house you’ve always wanted. You’ll get to establish your landscaping, and choose the perfect spot for your new home. The only downside is that landscaping costs extra and you aren’t guaranteed a rise in the value of your home.
Once you’ve made your final decision, click here to sign up at Homes for Heroes. We’ll connect you with one of our local real estate agents in your area. Let them show you the possibilities and save you money at the same time.