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Pros and cons of buying an existing house
- Pros: You know what you’re getting.
- Pros: A smaller deposit may be required.
- Pros: It may be closer to the city centre.
- Pros: It’s usually a faster process.
- Cons: It may be more expensive.
- Pros: First Home Owners Grant.
- Pros: You only pay stamp duty on the land when you build.
We’re actually going to be discussing whether you should build or buy a home and some of the pros and cons that come with doing both of those things.
So with real estate prices at all-time highs at the time of this recording and with interest rates that are extremely low right now people are actually starting to consider building versus buying used or buying an existing home.
So in this blog as i mentioned we’re going to talk about some of the pros and cons of building a home and i’ll touch on the existing home portion as well let’s get into it.
Okay so the way i’m going to present this is with the pros and cons of building a home and i’m going to interject the pros and cons of buying an existing home.
So this will make more sense once i start so let’s get into it number one is you get exactly what you want when you are building a home that is obviously the reason why you are building a custom-built home.
So you can get exactly what you want so you’re in complete control when you build a home you can work with an architect a general contractor you can be the general contractor you can work with a builder.
But basically you have control over the floor plan the finishes the layout the colors the landscaping pretty much everything it’s a blank canvas in most situations unless you are in a cookie cutter development which i’ll talk about later in the blog.
Now to counteract that point with an existing home you can still finish an existing home the way you want however you lose a majority of the control when you’re talking about layout and floor plan.
So with the layout and floor plan sometimes you have load bearing walls that you can’t demo sometimes you have certain structural issues that you can’t change so that’s definitely a pro in favor of building a home.
Now the second point that most of you may not think about is that there are no bidding wars when it comes to building a home.
So in my market right now houses are getting bit up thousands of dollars over asking price just because there’s such low supply and so much demand in the market with a new home there is no competition unless you’re literally you know trying to compete and buy a certain lot or buy the land.
That’s typically when you have competition with newer homes however when it comes to building the home say you already own the lot there’s no headache and no bidding wars when it comes to that number three there are no headaches with building a new home and for anybody that’s built a new home.
You’re probably saying marco you’re an idiot what are you talking about that’s why i have a huge asterisk right there.
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So new homes have little to no maintenance because literally everything is new with existing homes you have to worry about the roof the mechanicals the finishes the windows the lighting all that stuff may be decades old depending on what part of the country you’re buying in and how old the original house was built.
So if the original owners didn’t do any of that stuff guess who has to foot that bill it’s either going to be you or hopefully your insurance company but that’s that’s a topic for another blog.
So no headaches with a new home and yes trust me i’m going to get to this asterisk on on the flip side of the blog.
So number four newer homes or new homes are obviously more efficient they’re typically more energy efficient because they’re using better technology they have newer windows they have improved technology with the mechanicals and they’re also using energy efficient materials.
So if you’re somewhere that has four seasons this is very important because it’ll get you need your house to stay hot in the winter and you need to be cool in the summer and all of these newer homes have energy efficient technology that lets them do that number five is that this is common sense with a new home is that you are the only owner.
So think of this as a one owner vehicle or a one owner car you’re the first and only owner of the house so far meaning that with existing homes you have to the previous owner may have had pets they may have had uh mold they may have been dirty people in general they may have been hoarders.
You don’t know the worst thing is they may have been smokers actually where the walls are literally yellow but hopefully that gets remediated before the sale so my point is is that you know that everything in this house is fresh it’s new if you’re a clean person you can maintain it for years or decades without the house ever having any of those issues from an existing owner.
So let’s talk about some of the cons of building a home and i’m going to interject some points of existing homes and that as well.
So number one is stress building a home is incredibly stressful especially if you aren’t on the same page as your spouse or significant other.
So i continued the asterisks from the pros because i didn’t mean to make it say that building a new house has no headaches whatsoever i meant once you’re moved in and settled in and everything is working how it should then there’s typically no headaches because everything is new however the process of building a home is extremely stressful.
So you have to buy the land you have to get the financing if you’re not paying cash you have to deal with the general contractor or the project manager or the subcontractors if you are the general contractor or the builder sometimes i know couples that have gone through this process that have gotten a divorce during the home building process because it is.
So stressful so what i would recommend doing is getting a dedicated project manager especially if you’re working one of the national builders like adries or orion homes or whoever they will help you get through this process and alleviate some of this stress the thing with existing homes is that you know exactly what you’re getting.
So it alleviates some of that stress yes you can still disagree with your partner on fit and finish and colors and things like that however when it comes to floor plan and layout and all that you know big stuff and managing subcontractors an existing home doesn’t have any of those headaches.
So number two you have to wait to move in so depending on your builder and the type of home that’s being built you have these national builders that build these cookie cutter homes that go up in 90 days then you have custom built homes that could take anywhere from you know a year to two years depending on the size and scope of the project it typically takes 90 days to about two years to build a custom built home.
So what are you going to do that whole time typically you have to either rent a space whether it’s an apartment or an existing single family home i actually had a tenant in one of my properties he was a domino’s franchisee owner this guy made like 20 30 grand a month he owned a bunch of these dominoes and he actually rented from me and he was the best tenant ever however he did leave about a year and a half later.
So existing homes you don’t have to do this because it already exists so you don’t have to wait to move in you pick a closing date you get the keys you change the locks boom you’re moved into your new home.
So move-in weight is a big issue with new homes number three is that there’s little negotiation little to no negotiation.
So you know me i’m old school i like to haggle on everything with existing homes you can haggle on the stuff that’s inside the house you can hang on the price of the house you can say hey your roof is old knock off you know 15 grand off the price of the house you know otherwise get it fixed that kind of a thing with new homes there is little to no negotiation.
So other than materials you know say you’re buying in bulk for example it’s hard to negotiate the price on building a home especially with a national builder because typically they know their margins and their prices are set okay so with an existing home you have a lot more negotiation room number four we’re going to talk about hidden costs so new homes are advertised as starting at however you don’t really start racking up the bills until you start adding what you really want.
So as i mentioned earlier in the blog fit and finish and things like that play a big role in what the price per square foot is ultimately going to be for the cost of the house.
So there’s a big difference between you know custom cabinets and granite countertops than you know something that comes from like rooms to go or something and you get it done for super super cheap so if you have laminate countertops and you know not custom cabinets of course there’s going to be a big difference there so with existing homes you don’t typically have hidden costs unless you’re talking about closing costs and things like that that you just simply weren’t aware of but when it comes to you know fitting or outfitting an existing home the hidden costs aren’t there and then finally we have construction and landscaping.
So this is my beautiful drawing of an evergreen tree that’s that means landscaping in my hieroglyphics but that’s why you watch this channel for my art abilities right so you typically if you’re moving into a development for example and you’re one of the earlier purchasers obviously your house is going to be built before everyone else is.
So you’re dirt you’re dealing with noise dirt mud you know debris potentially nails in the road things like that also no one’s going to have landscaping for a year year and a half to two years the other thing with that that no one really thinks about not only does your landscaping look like crap every nothing is mature okay so existing homes they may potentially be in a mature development.
So they’re gonna have beautiful you know tall trees evergreens things like that depending on where you live with the cookie cutter developments where they just buy a big tract of land and just flatten everything you know that’s not a mature development it’s just going to be literally a cookie cutter development so obviously you can buy a buy a plot of land and build a new home somewhere super nice but i’m just talking about for a majority of the people viewing this blog.