If you're looking to buy a home, you may want to seriously consider building a home. The process of building a home is much different from simply buying a resale home. Just as with any major financial decision, there are pros and cons of building a home versus simply buying a resale home.
Pros of Building Your Home
The biggest benefits of building a home are getting exactly what you want and knowing everything in your home is brand new. You could build a completely custom home and pick out every single detail or you could save some money and build a tract home with a developer in a subdivision. Building a tract home in a subdivision won't allow you to build a completely custom home, but you may be able to pick from a limited number of floor plans and should still be able to pick out many of the finishes that make the house feel like home. New construction homes generally have a more contemporary feel with open floor plans in order to meet the expectations of what buyers want in the current housing market.
New construction homes are built to the latest building codes and are often built with energy efficiency as well as sustainability in mind. Energy efficient homes will help you keep your utility bills in check and help the environment at the same time. In addition to energy efficiency, many builders offer warranties on their homes. The components of the warranty will vary based on which company built your home and where it was built. Your wallet should be happy that your home is brand new because you will likely have lower maintenance costs during the first few years of home ownership.
Cons of Building Your Home
Of course, building a home comes with some drawbacks, too. The process of building a new home can often take six months to a year or longer depending on how customized you make your home. If you've already sold your old home, you'll have to find an alternative place to live for a short time, which can be expensive. While builders may give you a target completion date, many factors outside of their control can delay the completion of your home which can lead to frustration.
Timing isn't the only downside of building a home. Costs tend to add up quickly. You'll have to purchase land or, if building in a tract development, you may have to pay a lot premium to get the parcel of land you desire. Many builders offer standard finishes in their homes, but if you want something nicer, you'll have to pay for upgrades. Cabinets, counter tops, fixtures, flooring and even paint upgrades can add tens of thousands of dollars to the base price of your new construction home.
You will lose some flexibility when building your home, too. Many builders will barely negotiate on price, if they negotiate at all. If you're building in a neighborhood, chances are your home will feel like a cookie cutter duplicate of a home a few houses down. Building in a neighborhood also means you could be stuck with a homeowners' association that charges you dues on a regular basis and limits what you can do on your property and how you can design your home.
Tips for Building Your Home
After you've carefully considered the pros and cons of building a home, you may have decided that building is the right move for you. If so, make sure you don't visit any builders until after you've found a real estate agent you can trust. Visiting builders without a real estate agent may preclude you from using an agent later in the process, as many builders won't pay the agent a commission unless they accompany you on your first visit. Having a real estate agent is important because many builders use their own salespeople and contracts which are written to protect themselves, not you. Your real estate agent will look out for your best interests and make sure you're getting a fair deal.
Make sure both you and your real estate agent perform plenty of research on the builders you are considering. Some builders have a much better reputation than others and it may make sense to pay more for a home from a builder you can trust. After all, building a home is one of the most expensive purchases you may make in your life.
Finally, it is very important to realize that the model homes you visit won't be your future home. Many model homes have tens of thousands of dollars of upgrades, so it is important to know what comes included and what costs extra. Find out how much home you can afford and stick to that price point when shopping for homes at builders. Make sure you ask for what the total price will be after lot premiums, upgrades and any other charges that may apply. After learning the difference between the base price home and the model home, make sure you visualize what your new home will look like, rather than the model, before signing a contract to build a new home.