Buying A Home
smbenevides1989
member
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Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
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Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
What is better?
My H and I are new into the world of homebuying. We are not considering moving until we have a sufficient down payment for a house and our bad debt is paid off. So we are looking into another year of waiting. But being the person I am, I want to be extremely informed of all my options. We would like our first home to be our somewhat forever home (who knows what life throws at you). The question is:
What is better? Buying a home or building a home?
With the housing market the way it is, I could always purchase a foreclosed or auction home with the chance of revamping it to the way I would love it to be. (it's the architect in me to want to do this). Any opinion would be great. TIA
Re: What is better?
Well it depends on where you live and the supply and demand for new or older homes. In some areas, it is better to build, in others it is better to buy and older home.
For us, building was simply too expensive. We looked into it and even talked to a builder, but in the end we couldn't justify spending that much on a house. Now, we are looking at older homes. We haven't found one yet, but I don't see us having a problem finding something in our price range.
I have a hard time considering building just because I have not known a single person who had a good experience with building. Every single person I have known that chose to build has either ended up waiting (as in the project takes longer than expected) or shelled out more for unexpected costs.
There are some things you should consider, however. If you're already saving up for a down payment, then bear in mind you would need to have cash in hand to do any fix-up projects around the house. You could finance some of them, but I would avoid financing much more when you first buy a house - at least until you get used to the costs associated with owning a house.
Being young and having had to pay for our fair share of house repairs and renovations, I would say to buy a place that is turnkey and down the road make it into what you want. That will give you a chance to really figure out what you want in a place (which totally changes after you live there, by the way!) and then you'll have more money to finance your ideal renovations down the road.
Our first home we built. Current one we bought an existing home.
There are pros and cons to each for sure.
But without a doubt I can say that I would never build again.
As PPs mentioned, it depends on your area, but IMO unless you're building a high-end, custom home with all the pieces and parts hand-selected by you and your DH, the generic, cookie cutter types that builders are putting out these days are poorly made, with cheap materials, and cheap labor. And really they are pretty much in the same price ranges as the existing properties.
If you can find an existing home on a location you like/love that has decently new mechanicals (windows, roof, water heater, AC, furnace) then I think that's a great way to go. Over time you can make it your own appearance-wise.
Thank you for your inputs. I have a friend who has been building his home for 9+ years, and is still not finished with it. I guess it really depends on the money, which in my ideal area would cost a lot more than buying a home and fixing it up. I think for us being young (we are both 24) I think buying a home would be better.
Thanks again!
It would depend on what is happening in your market and submarket. In what city do you live? First off waiting is a bad thing at this time. Everything is on the rise for real!!! Prices and rates in particular and in most cases the increase will outpace your saving. You may wait yourself out of the neighborhood you want and maybe out the market period..... If you are a first time homebuyer and do NOT have 20% of the sales price (yes that is a lot of cash) laying around to put down on a home you need to get that score up to at least 640 and RUN NOT WALK to take advantage of the bond funds that are available in most cities that cover the 3.5% minimum down payment for first time homebuyers.... Yes there are funds out there that are essentially your tax dollars set aside for folks just like you who are gainfully employed and trying to purchase their first home and may be short that 3.5 - 5% down payment needed to originate a mortgage. Or, if you HAVE saved up at least 3.5-5% to put down choose a community new or used homes with the best schools (even if you don't have kids) and DO IT NOW!!! Unless we have another national catastrophe, next year that same home will cost you more at a higher rate. Trust in that.
To address the question of buying old versus new. That also depends on your market and location in the submarket too, but in general... If you don't have substantial cash laying around for a down payment then you most likely don't have the capital laying around to invest in the inevitable renovating, updating or repairing an older home either. Also.... monthly homeowners insurance premiums are 50-100% higher on a used home as opposed to new construction AND monthly energy costs can be almost double in an older home as opposed to a new low HERS score (Home Energy Rating) built home. Though the 'price' of an older home may be a little less than the 'price' of a new home, the total cost of homeownership on a well built, high energy efficient new home is substantially less than that of an older home of the same approximate 'value'.
Good Luck to you.
After thought......
I noticed several responses had bad experiences or associates with bad experiences building new. I have been around the new home construction business for a VERY long time all over the U.S. and I've just about seen it all. Let me assure you, all new homebuilders are not equal. Try not to confuse bells and whistles, trimmings and fixtures with quality of construction. They are two very different things. Anybody can put in pretty counters and fixtures, paint and fluff but a builders construction practices, materials, they use, guarantees and their after the sale customer service make all the difference in the world. You want both nice trim out and quality construction. A home built by a reputable production builder will more than likely finish on schedule and be better quality construction and a much better value than most high end custom homes that can be mostly fluff and mirrors and or an energy hog. Want to get an idea of what builder in your area builds quality behind the walls, call your local city inspector that does new home construction inspections and ask his opinion from what he's seen everyday on his job who builds the best quality home in your price range. Also, look for HERS scores in the 60's or lower. The process of building your first home with the right builder can be the smoothest & most enjoyable experience you could ever imagine if you choose wisely. I have done it with about 800 families in my career and I can count on 1 hand the bad experiences and some of those were not of the builders making. If you are in the Oklahoma City / Norman / Edmond area check out Ideal Homes. If you are in Texas or other states check out Lennar Homes. Two of the best in the business and the most buyer friendly too.
Good Luck to you!