The Expert Podcast

This is a question We get a lot when we talk to our realtor friends and even clients, whether or not you should build a house or buy an existing house And it's a really good question to ask if you're in the market for moving or relocating and there's pros and cons to each one and some of the reasons why you might pick one choice or another kind of hidden that most people don't think about So let's take a look first Obviously, if you buy an existing house, you can move in right away The house is ready. you wait for a closing and escrow might be a month and you're in the house wherever you build a new construction. You might be eight to 10 months out depending on your jurisdiction of permits and play. and approvals. But, that timeframe doesn't necessarily create a problem for everybody. One of the biggest. Obstacles to building a new house is people think it's going to be more money certainly a new home construction is going to be 200, 2 50 plus per square foot to build. So if you're building a 2000 square foot house, you're talking four or 500,000 in construction costs, not counting the land. So if you I add in land at in permits maybe some carrying costs. You know you could be 600 700 grand. Depending on where you live. For a brand new brand new. 2200 square foot home which is what most people would look at. So it is going to be more than a resale You can probably find a resale home…that is going to be a little less than that in most markets. But the other thing to keep in mind is on the new home You have zero accumulated. Repairs needed. You don't have any maintenance clock ticking. Even if you buy a resale home. That doesn't need anything today. If the roof is five years old, You're 15 years of. from getting a roof. Rather than 20 or 25. If you're septic system. It doesn't need anything It still might need something So those maintenance costs accrue even if they don't need anything today. You're closer to when those things are needed. In addition. If a house was built even five or six years ago, some of the efficiency. Details built into the house the installation. The leak down test the air infiltration. May not have had the same standards five or six years ago than they do today. And…on top of that you're going to find that. a brand new home you can build to your liking Obviously you can put the colors and the. Floor plan layout the way you want it. Is that worth something or not Maybe or maybe not. The other factor is depreciation. Real estate appreciates the house depreciates because the condition floor plan layout of the house gets less valuable over time. We're a new home. Has all the things that you want from day one but it is still also going to depreciate. In most cases, you're going to find that building a new home is going to cost more than buying a resale even if you factor in all those different things The question is, how long do you want to live in the house? How important is it to have exactly what you want? The other. Part of the equation is. Inventory. Is there something available? That's acceptable to you in the marketplace right now, or how long will it take for that to be available? Look if you think it's going to take an average of six or eight months to find exactly what you want anyways, you might as well find a piece of land which is easy to find Land is plentiful. And build a house and that way we'll have exactly what you want in that time period. The hard part is dealing with the building…Even if you hire a general contractor, you're going to face a lot of challenges dealing with that contractor dealing with delays, dealing with problems that come up and even maybe dealing with the financial hazard. Of the contractor treating you properly So…building a house can have. Major advantages in the long run. If you can get through that initial…obstacle of dealing with that building process, which nobody likes even the builder doesn't like the building process of new home construction because there's a lot of variables that come up that are unknown going into it. And many of them are not. preventable Sometimes permits delays. supply chain issues, cost variances of items. And there's always going to be something that goes wrong You kind of break something something will get damaged. lumber that. Arrives at the job site gets, you know it goes missing or something happened So you're going to find that the building process will have challenges but if you can prepare yourself for that deal with it you can have exactly the house you want. The colors you want move in Ready No one's ever lived there before and you can. build it and design it to your tastes.