While the home buying process involves a number of important choices, one of the very first decisions buyers need to make is whether to shop for an existing home or build a new one. Each path has its advantages and disadvantages. Here’s a look at both sides.
Building a new home
You are much more likely to get exactly what you want. For many, this factor alone is enough to choose building over buying, but there are other advantages, too. A new home is more efficient, especially with the new energy codes including better HVAC (heating, ventilation and cooling), insulation and air filtration standards
- You can customise the whole layout and design of your new house to suit you.
- When it comes time to sell, it may be easier to sell a newer home rather than an older one as they are seen as more appealing.
- There are a range of home loans on the market which have construction loans available. This can make it easier to manage the whole process as you have access to money at different stages of your home being built, rather than in one lump sum.
- You may be eligible for the first home owner’s grant (new homes) scheme. Contact your state’s Office of State Revenue to see if the grant is available and if you’re eligible.
Building a new home does not offer the same convenience as buying an existing house. Not only do you have to find the land, which will very likely not be in an existing neighbourhood, you also have to factor in the time to find an architect or builder, and choose every element of the new structure.
- A major downside is that you can’t move in until your home is built.
- You may also have to spend more than you anticipate if major issues pop up along the way.
- Things can still go wrong when building a home such as faulty appliances or sections not built correctly and needing to be re-done. It can take time and persistence chasing builders to get your home built according to plan.
Buying an existing home
There are two primary advantages to buying an existing home: convenience and cost. Once you are pre-approved by your lender, you can shop around, pick out a home and make an offer.
- After settlement is complete (this usually takes around six weeks after contracts are exchanged), you can move in right away.
- If you would like to be in a particular established neighbourhood – near work, school, friends and/or family
- Many existing properties have most things done such as landscaping and the gardens done, which is one less cost to consider.
The biggest disadvantage in buying an existing home may be that you won’t get exactly what you want. You may not be in love with the floor plan, may wish that half bath on the first floor were a full bath or that there were another bedroom on the main floor.
- It can sometimes cost more to change what you don’t like about an existing home compared to knocking it down and rebuilding. Make sure you do all your calculations first and shop around for contractors.
- Some renovation may require permission from your local council, take this into account as the process can take time.
- You may be faced with unexpected leaks and faulty wiring which can be quite costly to fix.
The decision to buy or to build is not an easy one, as each type of property comes with its own set of benefits. Ultimately, it will depend on your budget and the property in question. Speak to your mortgage broker about your personal financial situation, long term plans, and job security before you take the plunge, and weigh up all options carefully.
For an honest and unbiased opinion, talk to Think and Grow Finance today on 03 8390 5855 or email email@example.com