It’s a question many prospective homeowners might not consider. Building a home can feel too complicated. Too big. Like something other people do. But it’s not. And in competitive markets, building a home may be more desirable than facing off against bidders for existing homes. Here are a few things to consider…
What’s your timeline?
The average closing time for an existing home is around 50 days, though you could close in 30 days or fewer. A newly constructed home, however, takes an average of about eight months from start to finish. As construction delays can be common, you could wait up to a year until your new home is move-in ready.
Compare the Costs: Building vs Buying
People commonly believe it’s cheaper to buy an existing home than it is to build one. But there’s evidence to the contrary. A study by the national storage space company StorageCafe identified 18 U.S. states in which building is more affordable than buying. In Texas, for example, the median list price for an existing home last year was $412,000. The average building cost was $361,000, making it $51,000 cheaper on average to build versus buy in the Lone Star State.
Consider Where You’re Going
With an existing home in an established neighborhood, you can rely on a certain level of stability. If you’re building a home in a developing area, you may not have as much certainty what the neighborhood will be like in five or ten years.
Factor in Long-Term Costs
If building a home is initially more expensive than buying an existing one, you may still recoup those costs. New homes don’t require repairs, updates, or remodels. Newly built homes usually come with significantly lower utility bills thanks to energy-efficient appliances, modern construction techniques, and new HVAC systems.
Find the Right Financing
If you decide to build, you can lock in a long-term interest rate with the First United Bank Mortgage One Time Close Construction loan. The specialized loan has one set of closing costs instead of the two that are common with traditional construction loans. For existing homes, First United has a range of mortgage loans designed to fit the needs of every homebuyer.