Which is better: Build or Buy a House?
For most of us, our home would be our most expensive investment in our lifetime. First home buyers will spend time and energy to look or design the perfect home even before any contracts are signed. Also, each of us has a wish list of needs (the things that we must have) and wants (the features that we would like, but not necessarily required). We have many important choices when buying our first home, but one of the first decisions we need to make is whether to purchase a home or build a new one. What is the advantage and disadvantage of each?
Buying an Existing Home
There are two advantages when purchasing an existing home: convenience and cost. Once your bank loan is ready, you can look and shop around, pick out a home that meets your fancy and make an offer. You can hire a real estate agent that can streamline the process because they can help you find appropriate properties, guide you when negotiating and assist with all the paperwork. If your offer for the house is accepted, you may be able to move in and enjoy your new home within a few months.
There are numerous steps when buying an existing home such as loans, going to open houses, looking for the best price, inspections – but you can move-in early which is very compelling for some people to buy an existing home instead of a build. The time and convenience are significant for buyers with a limited period, such as those that need to move for that new job or have children that will be starting pre-school and they have to move out of their condo.
Also, in some cases, it may be cheaper to buy an existing home. A house usually depreciates in price even though the lot appreciates in prices. Although there are factors that help reverse the depreciation, like when you hire a famous architect and creating additional value for your home.\
Convenience Versus Customization
There are other reasons an existing home may be a better option like if you prefer to be in an exclusive subdivision near work, school, friends, and family. Also, if you want to live close to the town proper, you probably don't have a choice but buy a home since most of the lot is not available anymore.
On the other side, the biggest difficulty of purchasing a house is you will not get what you want exactly. You will not fall in love in that floor plan, and you may be wishing there be another bedroom on the main floor. Older homes may be obsolete, and no longer satisfy most of your needs. For example, an otherwise beautiful three-bedroom house may have no existing walk-in closets, or the kitchen interior is too small for your island counter-top. Unless you are incredibly lucky and find an existing home that has everything that you want, you will spend more money on remodeling, repairing, decorating and landscaping. These expenses should include into the overall budget, or you may end up going for the wrong choice.
Building a Home
Building a new home will surely not give you the same convenience as buying an existing house. You may end up with a subdivision with few existing neighbors. Then you also must find time to look for an architect or contractor. You should look around and choose every detail of your new home. You also need to worry about utilities, such as whether the subdivision gives you access to water and sewage, or requires a deep well and septic system, along with building and occupancy permits.
However, you are much more likely to have your contractor to build your home exclusively for you. For most of us, this factor is enough to choose to build over buy. Also, newly constructed home is usually more efficient and accommodating to new technology needs.
More benefits? A recently built home is more efficient and accommodating to new technology needs. You can use green appliances, toilets with bidet, green plumbing fixtures and green electrical and lighting fixtures for a more sustainable home. You will have the option to install, conduit and wire for technology upgrades, such as home automation and solar.
The initial cost of a building a home may be high, but the advantage is that it will provide better investment than buying a home. Another factor is a new home will require fewer repairs and less maintenance which translate to saving both money and time. Also, you can get a warranty for your brand-new house.
Besides all of that, building a new home provide a better satisfaction since you are involved in the process. The home is yours matching your style and personality.
Time and Money
The biggest risk to building a house is higher costs and longer time frame. You can limit the risk by hiring a reputable builder and having a good contract in place. Try to insist a lump-sum contract, instead of a cost-plus contract since a lump-sum contract specifies a fixed price for construction. The builder will carry the risk of cost overruns instead of the buyer.
Also, your contractor can work with you to help you reduce costs. Materials and fixture substitutes can save you thousands of pesos. Ask ahead of time if there's a cheaper alternative. Please be reminded that anything out of the ordinary like custom colors and patterns is certain ways to go over budget.
If you are buying a builder home or pre-packaged home, be sure that be thorough that everything you need will include in their checklist.
The contract must include a construction time duration. If you are an OFW, ask if the builder will provide progress photos. Determine what will be your main means of communication throughout the process. Always maintain good communication with your builder. You must be happy with the design/specs before you begin construction. It is not okay for everybody if you change your mind about the color of your rooms after they have painted it.
The Bottom Line
There are many things to consider when either buying or building your house. Whichever you choose, a qualified and experienced professional real estate agent or a licensed general contractor can ensure that your journey to your dream home goes as smoothly as possible.
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