When you are ready to invest in a new home and make it your own, the question inevitably arises — will you build a new home or buy an existing one? Both options have their own benefits and drawbacks, so it is a difficult decision to make. In the four years from 2015 to 2019, 3.46 million new homes were built in the U.S.1, and 1.3 million in 20212. Many sources say that this is insufficient to meet the demand3 of buyers seeking new construction. With all the benefits that new construction can offer, though, the appeal of an existing home’s history remains. If you are on the fence and debating building vs. buying, check out this guide outlining all the pros and cons of each option.
Building a New Home: Pros and Cons
Building a home has obvious appeal — who does not want a home that has been built just for them, to their specifications? A serious consideration requires a more in-depth analysis of the pros and cons. Read the following pros and cons to make a well-informed decision about building vs. buying.
Pros of Building
Building a personalized home offers many benefits that homebuyers can enjoy. Some of the significant benefits include the following:
- Control: as the home’s buyer, you can dictate its floor plan, location, and many other details
- Personalization: you get to choose the fixtures, and amenities included in the home
- No buyer competition: once you own the lot the home will be built on, you never have to worry about competition from other buyers
- Less maintenance: newer homes tend to have fewer maintenance needs than existing homes
- No toxic materials: older homes often contain outdated and outlawed materials, but new homes never do
These benefits make the advantages of building vs. buying clear.
Cons of Building
Though there are many pros, there are certainly also some cons when it comes to building a home:
- Unexpected expenses: though construction will come with an estimated price tag, there is always the possibility of unforeseen expenses. JTB Homes solves this by locking in the estimate pricing and carrying the construction loan for the buyer, so if pricing goes up on items, we take that hit. This does not apply to unavailable items
- Wait time: Building a home typically takes longer than simply buying an existing home
- Landscaping: Unlike an existing home, a newly-built home will not come with landscaping, which can be a considerable cost — JTB Homes offers landscaping upgrades on new homes
These cons may weigh your decision towards buying an existing home — but buying an existing home has its own cons, too.
Buying an Existing Home: Pros and Cons
If the pros and cons of building vs. buying mentioned above have you leaning towards buying, you should consider the pros and cons of buying an existing home, too. There are plenty of reasons why it is a good idea for some — but not for everybody.
Pros of Buying
Buying an existing home has many benefits, including the following:
- Less wait time: once you have purchased a home and closed on it, you can move in on the date indicated in your sales contract
- More accessible financing: the house itself offers collateral to lenders; financing is typically easier to obtain for an existing home
- Mature landscaping: an existing home will usually come with landscaping intact, which eliminates a significant cost
These benefits make the decision of building vs. buying difficult.
Cons of Buying
Building offers plenty of benefits, but it comes with drawbacks, too:
- Time and effort: you want to find the perfect home, but it takes time and effort to do so
- Competition from other buyers: when you do finally find the perfect home, you can find yourself locked into a stressful bidding war with other buyers
- Compromise: buying an existing home requires a certain degree of inevitable compromise
- Maintenance issues: it is, unfortunately, true that an existing home is far more likely to have maintenance issues than a new home
Consider all the pros and cons when considering building vs. buying.
Costs of Building a House vs. Buying
When you are looking at the downsides of both building and buying, your decision becomes a matter of priority. What is the most important to you — convenience or personalization? Maintenance issues or mature landscaping? Ultimately, you need to think about the costs of building vs. buying.
Costs of Building
The average cost to build a home comes in at around $400,0004, and JTB Homes offer luxury construction designs that range in price from $325,000 to $800,000 for a single-family home. A condominium built by JTB Homes can range from $350,000 to $500,000 and includes the cost of land, which in Michigan, offers a value per acre of $23,7655. The expenses can quickly add up when you’re building a new home.
Costs of Buying
Though it’s expensive to build your own home, buying an existing home is certainly costly, too. The typical value of a home in Michigan is $235,5446, but this number doesn’t account for any renovations, repairs, and updates that homebuyers will need to invest in upon purchase. These expenses can vary widely and start at a few thousand dollars or cost tens of thousands of dollars. Though homes undergo an inspection prior to purchase, there are always unexpected expenses that can surprise buyers of an existing home.
Build With the Best in West Michigan
Homebuyers who want to build a new home in West Michigan can partner with JTB Homes. With over a decade of experience, we offer our clients experience, excellence, and quality. Choose from our portfolio of floor plans and meet with our architects to personalize them. To get started or request more information, call us at (616) 916-8895 or reach out to us online.
1 https://www.statista.com/statistics/377830/number-of-houses-built-usa/
2 https://www.census.gov/construction/nrc/pdf/newresconst.pdf/
3 https://www.businessinsider.com/us-underbuilding-housing-over-the-past-decade-2020-9
4 https://www.forbes.com/advisor/home-improvement/cost-to-build-a-house/
5 https://www.usatoday.com/story/money/2019/05/08/the-most-and-least-valuable-states/39442329/
6 https://www.zillow.com/grand-rapids-mi/home