Should I Buy an Existing House or Build New?
In the last 6 months, 7% of the homes sold in Dane County have been new construction, leading many buyers to debate buying an existing home or building new. It can be fun to think about all the personal touches you’d put into a new home, but it can also be daunting to think about the whole process of building. Here are some of the pros and cons of building.
- You get what you want – This is the biggest benefit to building. You get to choose the layout, the finishes, the colors, etc. and you can make the house exactly what you want. Watch out though, it can be difficult to stay within a budget when picking every finish.
- It’s low maintenance – Since everything is new, you hopefully won’t have to spend money on big maintenance items in the first several years.
- It uses less energy – New homes are generally more environmentally friendly with more efficient furnaces and water heaters, better insulation, and plumbing fixtures that use less water.
- It’s more expensive to build – The average new construction home in Dane county in the last 6 months was $176.81 per square foot, while existing homes were just $136.19/SF. You can definitely get more space for your money with an existing home.
- Financing can be more difficult – Unless you are buying a spec home that’s already built, many of the traditional low down payment options are not available for new construction. Typically you’ll need to do a construction loan with a higher down payment, and the bank will release money to the builder in several different phases of construction.
- It can be harder to sell – If you build in a new subdivision it could be difficult to sell your home if you need to sell before all the lots are full. When somebody can build exactly what they want right next door to you for the same price as what you are selling your home for, why would they buy your house? Don’t worry though, once the neighborhood is full, this problem goes away.
The bottom line is, building a home or buying an existing house is all a matter of personal preference. There’s no right or wrong answer. If you’re interested more on the construction process checkout our blog posts from our home build.