Pros and Cons: Building a House vs Buying

You’re ready to make a big move! Although it’s exciting, the decision to look for a new home sets off a cascade of other decisions, from the number of bedrooms and bathrooms to the type of kitchen that suits your lifestyle to the neighborhoods you’re considering. However, one of the biggest choices of them all involves building a house vs buying.

Both options offer unique advantages. If you envision a highly specific home and can afford to wait for a new home to be finished, new construction allows you to bring your dreams and vision to life.

Conversely, if you need to move quickly, an existing home might be the ideal choice (unless you can find a quick move-in new home that suits your needs).

Understanding the Difference

Before we take a look at the pros and cons, let’s start with some definitions. An existing home has been previously occupied, even briefly, by other owners. It’s complete, has had a prior owner besides the builder, and, if recently built, holds a certificate of occupancy.

A new home, on the other hand, is brand new and has never been lived in. It may be in various stages of construction, from just having a foundation to being completely finished. Wherever it is in the process, when it’s done, you’ll be the first to call this particular place home.

Some new construction homes are built "on spec" (without a pre-contracted buyer), while others are custom-built to a buyer's exact design and specifications. Homebuilding companies will build spec homes to display their product and capabilities or help introduce a new community. These homes are often used as models that can be toured by potential buyers.

Key Considerations: New vs. Existing

Choosing between new and existing homes requires careful consideration of several factors:

Availability: Buyers who’ve been trying to negotiate the current tight housing market understand the issue of supply and demand. There just aren’t enough existing homes on the market to accommodate everyone who wants to buy. Those that are offered for sale are often fought over by buyers and sell for well over their asking price. With a new home, buyers can make a purchase without being caught up in a bidding war.
Price: In the past, new homes generally cost more than existing ones. For example, in September 2022, the average new home was 32 percent more expensive than the average existing home. That percentage decreased in 2023, according to Lending Tree and the National Association of Realtors. In fact, “in some places today, you may find that the cost to build versus buy is roughly the same,” Lending Tree reports. These costs vary according to region.

Keep in mind that even if the upfront cost might be higher for a new home, an existing home can require expensive renovations to make it suit you and your family perfectly. With an existing home, you may also be required to replace things such as roofing, carpeting, plumbing fixtures or HVAC sooner.

Financial implications: Existing homes offer predictable costs and potential seller contributions to closing costs, making them appealing to first-time buyers. New construction can involve higher closing costs, and custom builds often require substantial deposits.
Timeline: Existing homes (or quick move-in new homes) allow for immediate occupancy, typically within a few weeks or a month of contract ratification. On the other hand, new construction often involves a waiting period of a few months or up to a year.
Wish list: Everyone searching for a home has a list of “must haves” for their new residence. If the inventory of existing homes for sale is limited, you may have to compromise on your list. With a new construction house, you may be able to customize the home to include more of your wish list items.

The Advantages of New Construction

As you make your decision about building a house vs buying, you might consider these benefits of a newly built home:

Tailored to your taste: From the floor plan to the details like countertop materials and carpet color, building new allows you to personalize many of the aspects of your home, reflecting your unique style. Whether you dream of a modern farmhouse feel or a contemporary vibe, you make the choices from the start.
Up-to-date design: If you’ve been visiting older homes on the market, you may notice that their layout is different than what many current buyers prefer. Open-concept kitchens at the heart of the home, first-floor owners’ suites, walk-in closets, laundry located near bedrooms and easy access to outdoor living are features that are not often found in older houses. With a new home, you have greater access to the design and amenities that today’s buyers and families want for their lifestyle.
Modern efficiency: You can enjoy years of worry-free living. New homes adhere to the latest building codes to keep your family safe and feature up-to-date technology, minimizing maintenance headaches and costly repairs. With a new home, you can tap into the benefits of smart-home technology to increase convenience, safety and security.
Energy savings: Benefit from cutting-edge energy-efficient systems and materials, leading to lower utility bills and a smaller environmental footprint. Older homes may have less efficient windows and older appliances that may not conserve energy like newer models.
The pristine advantage: With a new build, you get to experience the joy of being the first owner. Everything is brand new, offering you and your family a fresh start in a community where other new neighbors will be looking for friends and connections.
Market advantages: When you decide to build a new home, you don’t need to rush around to view, bid on and inspect existing homes. This current market also works well for sellers: If you have a home to sell before moving into a newly built house, it’s a good time to do it.

Which Home Is Right for You?

Ultimately, the best choice depends on your individual needs and preferences. Consider factors like maintenance requirements, location and homeowner association fees as you compare builders and neighborhoods.

Regardless of your choice, select a home that resonates with you. It's a long-term investment, a place where you'll create lasting memories. Choose the house that feels like home.

Frequently Asked Questions

How do I research and find reputable home builders in my area?

Check online reviews and ratings (e.g., Google, Yelp, BBB), and ask for recommendations from friends, family and real estate agents. You can also visit model homes and talk to current homeowners in their developments. Reputable builders should have a builder's license and insurance.

What questions should I ask a potential home builder?

How long have you been in business?
What types of homes do you specialize in?
Can I see examples of your previous work?
What warranties do you offer?
What is your process for handling change orders?
What is your estimated timeline for construction?
What are the included features, and what are the upgrade costs?

What should I look for when evaluating a new housing community?

Location and proximity to amenities (schools, shopping, etc.) are important. You should also research the future development plans for the area. The quality of infrastructure (roads, utilities) in the development, lot sizes and layouts should be considered, along with homeowners' association (HOA) fees and rules. Finally, it’s a good idea to research the financial stability of the developer.

How important is it to visit model homes, and what should I look for?

Very important. Model homes showcase the builder's quality and craftsmanship. As you tour a model, try to look beyond the furnishings and decorations. Try to assess the:

Builder’s attention to detail.
Quality of materials and finishes.
Layout and flow of the home.
Overall design and style.

Be sure to ask about what features of the model home are standard, and which are upgrades.

What should I know about the builder's warranty?

A builder’s warranty is one advantage to purchasing a newly constructed home. To understand the coverage and duration of the warranty, ask about what is and is not covered and the process for filing a warranty claim. Make sure that the warranty is backed by a reputable insurance company.

What is the role of the sales representative at a new home development?

Sales representatives are there to help you understand the development and the builder's offerings. They can provide information about floor plans, pricing and available options.

Start the Journey to Your New Home Today

We’re happy to talk with you as you consider your options for a new home. Contact us today to start the conversation and hear about quick move-in homes and any current promotions for new buyers.