Should I Buy a House or Build a House?

October 1, 2014 Marc Edelstein FHA mortgages in Michigan, First Time Home Buyers, Michigan Mortgage Banker, Michigan Mortgage Lender, Michigan Real Estate Tips, Mortgage Preapproval, Oakland County Mortgage Banker, Wayne County Mortgage Banker 0 Comments

Should I Buy a House or Build a House?With all of the new construction here in Michigan and all around the nation, the question that keeps coming up is: should I buy a house or build one? And while the answer is, of course, dependent upon your individual situation, I can give you some general ideas of the pros and cons of each.

Building a House

There is a certain allure to being the first owner of a new home. You can create it exactly as you want it, you know there are no hidden problems, and who doesn’t like something clean and new? The yard will, generally, be in perfect order, and you have a contract for a number of years in the event something should break, the house should settle, or nails should pop, protecting you from many of the fears of home ownership. Houses built today are more efficient, have better floor plans, less wasted space, and usually have grand entrances and beautiful details throughout.

But, all of this comes at a cost. You are likely to pay 20-30% more for a new house over a house even 10 years old with the same square footage and level of detail. You also don’t hear many people talking about the “charm” of a new house. New houses can be beautiful, but it is a different kind of beauty compared to an old Victorian or a true Craftsman style home. So if you want that look, or “charm,” you are going to be disappointed with a new construction home.

Buying a House

Buying an older home gives you flexibility. Not the flexibility in home style and design that a new build gives you, but flexibility in location, price, and age. I have had many clients set on having a 60 year old house. They say houses today aren’t built like they used to be, so they buy an older house, gut it down to the frame, and rebuild. You can also negotiate a much better price with a used house; if three are on the market in the same neighborhood with similar amenities and size, you can use them against one another to bring the price down. If you want to live in the heart of Northville, you can buy an older home there without an issue, but given the scarcity of available land, new construction is hard to find in certain areas and may not be as conveniently located.

That all being said, you don’t always know what you’re getting when you buy an older home. Inspections don’t include opening walls to search for water damage or infestations, grading issues in yards can often go unnoticed, and even issues with electrical or water may not be found for six or twelve months after moving in. And since you are now on your own – there is no contractor there to come fix problems that come up – if the central heating unit dies out or a water pipe bursts two weeks after you move in, it is up to you to do the repairs.

Any way you slice it, owning a home is certainly better than renting, but finding the right home, whether new or older, is important. In the end, you need to lean on your Realtor and your lending professional to guide you in your decisions.

If you have any questions about which type of house to buy, or if you need a prequalification letter, please contact me. If you have anything to add about the pros and cons of building a house versus buying an older one, please leave a comment.

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