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The Economics of Building New vs. Buying Used

February 4, 2020

Investing in a home is one of the most significant financial endeavors you will ever make. Homebuyers typically spend lots of time researching communities, prices, insurance, taxes and more while searching for the perfect home. Most times the first question is whether to invest in a new construction home or a home already built.

You’re probably wondering, is it cheaper to buy or build a house? Who is the best builder in Gulfport MS? If I build, should it be in a community or on my lot? Each has its own set of advantages and disadvantages making it a complicated decision.  …

It is vital to examine your goals for the home – the must-haves, and the wants. Think about your current lifestyle and future goals to determine the best features for both the present and in the years to come.

The Debate – Buying New or Used

Buying a pre-existing home may have a shorter closing process depending on the completion date of the new construction home. Some home builders will have move-in ready inventory which will have the same closing date, if not sooner, than a used home. We cannot forget the opportunity for personalization that new home construction allows. How do you decide which option is best for you? Let’s look at the economic aspects of each.

Buying an Existing House

There are benefits to buying a used home depending on the time frame, convenience, and cost. Once you have been pre-approved for a mortgage and know your budget, home shopping is much easier and less stressful as you will have an idea of what type of offer you can make to the seller. There’s nothing worse than falling in love with a home and then finding it is beyond your budget. It can quickly sour the entire home buying experience as you may never find one that measures up.

When you purchase an existing home, sometimes you have better options for location. However, unforeseen repair costs can overshadow moving to another location. If you are looking at a home that needs remodeling, the average cost to do so is almost $50,000.

Building a Home

Many homebuyers think a custom home is out of their price range but forget to take the total cost of ownership into consideration. Repairs, new appliances, updating, etc. Building a home is a great choice considering, in the end, you have what you need, everything is brand new, low-maintenance and under warranty. New construction homes are also more energy-efficient saving on utility bills and can be built with materials that are sustainable to the environment.

Once again, getting a pre-approval from a mortgage lender or bank is essential. Your home builder will take the approved amount into consideration when planning your home to give you most, if not all, of the items on your wish list. Keep in mind, the cost to build a house varies based on location, customization, homesite and lot preparation.

When building a new home, you hire someone who specializes in designing a home around your current needs, lifestyle and those you feel you will need in the future. Do you want three bedrooms and an office? No problem. Do you prefer open-concept or individual rooms? Easy plan changes. Ultimately, the choice is yours.

When building from scratch, it is important to note that the average home takes between 5-7 months, which is not always convenient for those who need to move quickly. But remember, while building a home takes longer than buying a used one, you establish an emotional connection and sense of pride by living in a home created and designed by you.

In Conclusion

Whether you go with a brand new construction home or buy a pre-existing home, you first need to determine your budget, create a list of wants and needs, and decide on a general location. If you would like to build a custom home on the Mississippi Gulf Coast, Acadian Homes is here with the expertise and passion needed to build your dream home. Whether you are looking to build on your lot or in one of our communities, contact us to learn how we can help.

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This post was written by Acadian Homes