Whether you’re a first time homebuyer or you’ve been around the block, there are always a lot of things to consider when you set out looking for a new home. You need something sufficient for the size of your family, in a location that’s convenient enough for all of your daily activities, and at a price that works for your budget. Then there’s the question of design and personal taste. Your home is something that you’re going to be spending an awful lot of time in, and it only makes sense to look for something that appeals to your aesthetic sensibilities.
Of all these concerns, budget may be the most important for the average homeowner. Obviously you’d like to own your dream home in a perfect location, but more often than not, your budget will determine what kind of compromises you need to make.
It’s a common assumption that homebuyers on a budget should focus their attention on buying a used home. This is, after all, the cheapest route – is it not?
You might be surprised to learn that the answer is not always yes. There are situations in which building a new home can be more economical and more sensible. But why is this?
It’s necessary to look at it from a slightly more long-term perspective. It’s absolutely true that buying a used home, on average, will cost less than buying a piece of land, then working with an architect and builder to design and construct a brand new home. But it’s really comparable to buying a used car versus a brand new one. When you buy a used car, the price will be lower. But if it’s a decent car, the price won’t really be that much lower.
Here’s how it breaks down: The average cost of a used home in the United States is around $189,000. The cost of building a new home? Around $300,000. This, of course, does not include the cost of the land.
This is certainly a big difference in cost; but let’s get back to the car analogy. When you buy new, you know exactly what you’re getting, and your investment is protected against defects by a guarantee or warranty. Buying used saves you cash, but doesn’t offer the same level of protection. In fact, you could be looking at major problems “under the hood” that will generate significant costs over time.
That’s not to say building a new home is clearly a better choice; it really comes down to the wants and needs of your family. The availability of land, especially in populated areas, makes it very sensible for many people to buy (and renovate) an existing home rather than find an available piece of land and build new. On the other hand, building a new home offers you the ultimate in customization.
What’s the home of your dreams?
Obviously, if you decide to building new home rather than buy a used one, you will still be constrained by how much money you can spend. You will have to make compromises in terms of design, size, materials, layout, location, appliances, and amenities. But if you have a skilled homebuilder on your side – someone with an excellent track record of client satisfaction – you’ll be able to make the best possible decisions in all aspects of your homebuilding project. Since there is arguably no purchase more important and this, it’s worth finding a homebuilder who will exceed rather than just meet your expectations.