Should you buy or build a house?
There are few things more satisfying in life than having your own house. However, there are two distinctive ways of obtaining your own roof over your head—You can choose to either buy or build a house. The choice ultimately comes down to your specific situation. Furthermore, you may want to consider how you will protect the appliances in your house. Before you start looking at a list of home warranty companies, you may want to consider how much will the annual premiums change depending on your choice. Newer homes will have lower annual premiums, of course, but the savings might not be worth it all the time. In this article, we will provide you with a few things to consider before making a choice and outline the advantages of both buying and building a house.
Things to consider before deciding whether to buy or build a house
First of all, you will want to consider the three most important factors:
- Time commitment
Additionally, you will also want to consider the protection of your home and the potential expenditures that are associated with it. For example, if you are buying a house, you will want to know does a home warranty cover pre-existing conditions. If building a house, you will want to know how much you will need to spend on the home security system.
Carefully analyze the costs
Most of the time, buying a house will be cheaper. However, this may heavily depend on your circumstances. If you want to live in a densely populated area, chances are that you will need to spend a small fortune on the plot and the building materials for a new house, not to mention the labor costs. One of the many mistakes that home buyers make is to make the assumption that building a house is cheaper than buying it. This can be the case, of course, but it is highly unlikely, given the current housing market. It used to be that building a house yielded enormous savings, but the market did a 180 in that regard.
Furthermore, you always have to assume that you are going to spend much more than initially estimated when building a house. It is just the way construction works. You need to factor in these additional costs when doing your analysis.
The next big thing that you need to think about is the time investment. Therefore, you will need to:
Think about how much time you are willing to invest
When faced with the question of whether to buy or build a house, the time investment might be the most important factor. The fact of the matter is that you are going to need to spend a considerable number of hours overseeing the construction, ensuring that you are getting what you paid for, etc. Another one of the most common mistakes made by first-time home buyers (or builders) is that they underestimate the time investment required for the process. If you are someone that simply does not have a lot of time on their hands, buying a house may be a better decision. On the other hand, if you have all the time in the world, you might as well spend it making sure that your new house is everything you want it to be. Provided, of course, that other factors support your decision.
Speaking of other factors, customization is the next one on our list.
Consider how much you want to customize your house
The fact of the matter is that most people want their stuff to be brand-new and tailored exactly to their specifications. Houses are no exception to this. However, customizing an already existing house can be extremely challenging, not to mention costly. On the other hand, customizing a house that you are building is much easier. Your choice will usually come down to the number and complexity of customizations. In other words, you need to budget for home improvements and repairs regardless of whether you want to buy or build a house. The best thing to do is to write down all of the customizations and then take a good, hard look at them. If they are overwhelming, it might be easier to build a house to accommodate them. Otherwise, you may as well purchase an existing house and make a few modifications.
Now, let’s talk about the advantages of either approach.
Advantages of buying a house
If you are looking to buy a house, you will find the entire process to be:
- Less time-intensive
- Extremely convenient
Furthermore, you will usually have an existing home warranty attached to your home. You can, of course, choose to purchase your own policy, but there may be considerable benefits for renewing your home warranty. You may be able to “cash in” on the previous owners’ diligence, for example. At the very least, you should take a good look at the home warranty policy before you buy a home. That will provide you with the best possible insight into the working order of appliances in your new home.
That said, let’s explore why you may want to buy a house.
Buying an already existing home is usually cheaper
The fact of the matter is that the decision of whether to buy or build a house usually comes down to the cost. Where cost is concerned, it is still a lot cheaper to purchase a pre-existing house than it is to build a new one. Here are a few statistics to consider:
- The average cost to build a house in 2019 was more than $485,000
- The average cost to buy an existing house in 2019 was a bit more than $310,000
- Home prices rose by 15% in 2022
- Building material costs rose by 19% in 2022
- Inflation increases building costs
Overall, it may be cheaper to build a home in 2022 than it was in 2019, compared to buying one, but it is still more expensive. In almost every situation, building a new house is going to be costlier than buying an existing house.
That being said, it all depends on how much costlier building a house is. There are significant advantages to building a house, of course, many of which can easily influence your decision. But we will get to them soon enough. For now, let’s take a look at the second advantage of buying a house.
It takes far less time to buy a house than build it
This can be a huge factor when deciding whether to buy or build a house. It is not that buying a house is not a significant time investment, as you still need to visit the prospective homes, spend time searching, etc. However, it is a far cry from spending the time required to actually build a house. Unless you are planning on a pre-made house that you can simply “plop” onto a piece of land, you are looking at 8 months at the very least, according to the most recent data from the U.S. Census Bureau. Considering that, on average, it takes only around four and a half months to buy a house, buying a house is far more time-efficient.
Buying an existing house is extremely convenient
You simply can’t match the convenience of simply purchasing an already-made product. Houses are a product, after all, and while purchasing one does come with some inconveniences (finding a lender, having to view multiple properties, etc.), it is still much more convenient than having to build a house from scratch. Not that you will be building it, of course, but the building process is highly stressful for everyone involved.
Unless you plan to leave the entire process in someone else’s hands (a bad idea), building your own home will be one inconvenience after another. Lastly, pre-existing houses usually already come with pre-installed home security systems and already have a home warranty on them, providing even more convenience. You will not have to worry about how to avoid home warranty scams, either, as the previous owner already did all of the work. If you value convenience highly, it is usually best to buy a house, simple as that.
That said, building a house comes with its own advantages. Let’s take a look at them now.
Advantages of building a house
Here are the three most important advantages of building a house:
- Low energy costs
- Easier maintenance
Additionally, building your own house is a unique experience. Words can’t describe how amazing building a house can be, even if you are not the one actually building it. If you are, however, not only will you be able to reduce the building costs to a minimum, you will get to experience extreme pride for having built the house with your own two hands. Yes, you will have a bit of help, of course, but the sentiment stays the same.
You can customize your house to your heart’s content
As mentioned previously, customization is one of the most important factors when deciding whether to buy or build a house. If you require extensive customizations, it is always better to invest in building a house than it is to modify an existing one. Then there’s the fact that some customizations simply cannot be applied to existing homes. Basically, if you want a “perfect” home, you will have to build one from scratch.
New houses feature low energy costs
These days, you can purchase all sorts of energy-saving appliances. Modern appliances have become extremely energy-effective, allowing you to minimize your overall energy expenditure. While you can, of course, introduce these appliances to a newer home, it will come at a huge cost. Replacing an energy-inefficient HVAC system, for example, can set you back tens of thousands of $ alone. Furthermore, you get manufacturers’ warranties on new appliances, allowing you to postpone purchasing a home warranty for a couple of years. The fact of the matter is that newly built homes lack most of the reasons why you need a home warranty plan, at least for the time being. Lastly, the energy savings alone will serve to offset the higher cost of building a house.
It is easier to maintain a brand-new house
Due to the fact that a new home has to conform to the current building standards, maintenance is a lot easier when you build a house. That is not to say that you will need to do no maintenance whatsoever, but it does mean that you can postpone maintaining your home for at least a couple of years. You will not have to worry about any leaky roofs, water damage, or anything of the sort.
Should you buy or build a house?
Aside from considering all of the above factors, there is yet one more thing that you can do to make this decision easier: Talk to an experienced real estate agent. They can provide you with the best available deals in the area of your choosing, allowing you to make an easier decision. Furthermore, good real estate agents are capable of analyzing your situation and providing you with great recommendations.
The easiest way to find a real estate agent is through the Consumer Opinion Guide. We maintain a database of highly recommended real estate agencies that can provide you with answers to all your house-related questions. Lastly, no matter what decision you end up making, know that it is going to be the right one! Good luck!