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A home is a major investment, and individuals and families will always want nothing less than the best that their money can afford.
One of the most frequently asked questions in the process is whether it is better to build a house from scratch or purchase a completed one (see houses and lots for sale). The decision between these two methods of acquiring a home takes into account several variables, all of which should be carefully considered before proceeding with either plan.
Customization
The primary reason people choose to build a house from scratch is the ability to customize it. Given a blank plot of land, customization will include practically all aspects of the home, including the aesthetics of the exteriors, the layout of the rooms and areas, and the design of the interiors (check out residential lots for sale).
Convenience
Building a house from scratch requires much more effort than buying a completed one. Even before construction starts, owners must acquire various permits and pay different fees. Owners will also have to keep tabs on the construction progress to ensure everything is going according to plan (learn more about the fees involved when buying property).
In comparison, buying a finished house from a reputable developer will mostly only require payments and signatures. If there is any legwork, it would be just in choosing the location, and which home to buy.
The residents will have to do nothing more than move in once the purchase process is completed, as the developer will make sure that all other legal requirements are handled without any hassle to their customer.
If you plan to buy a house, ready-for-occupancy (RFO) and pre-selling are some of the terms you will encounter. RFO homes are properties you can move into immediately once you have finalized your purchase. Meanwhile, pre-selling properties are homes sold before the project’s planning or construction phase.
You can move in immediately if you plan to buy an RFO home. You can also invest in fully-furnished property, which is ideal for first-time homebuyers who want to skip the hassle of buying furniture and interior designing. Pre-selling houses are best if you want to customize your home and make adjustments if needed.
Learn more about the difference between RFO and pre-selling homes.
Construction Costs
The cost comparison between building or purchasing a house varies, depending on the future homeowner’s capabilities and connections. The comparison is made even more complicated because the cost of construction for a new home will likely change from initial quotations, depending on factors such as availed discounts or setbacks.
The price of a finished home is clear, and most of the time, already takes into account economies of scale so that the developer is able to provide a better price compared to building the same house from scratch. When purchasing materials for just one house, the owner may not be able to enjoy such discounts, which is the price to pay to be able to customize the construction.
However, for savvy homeowners with connections to suppliers and contractors, there is the possibility of building a customized house at a lower cost than buying a finished one, though that will take a lot of negotiations and bargain hunting.
Maintenance Costs
Buying a finished house, however, may entail higher maintenance costs, especially if the property is not a brand new one. Even new homes may already warrant maintenance costs, particularly if it took a while to sell them, which includes minor repairs for damaged components or slight adjustments to fit the needs of the new owner.
Meanwhile, a house built from scratch will likely not require maintenance costs for years, if the owner properly oversaw the construction. With fresh materials and components that are still under warranty, the residents will not have to worry about repairs for a while.
Value Appreciation
When looking at completed houses, buyers will be able to look at the history of the prices in the area and see the appreciation of value of the properties. This may give them a good idea on how much their home will be worth in a certain number of years, which will come in handy if there is a plan to sell the property again for whatever purpose.
Constructing a new house, especially in an up-and-coming neighborhood, is more of a gamble. The value of the property may not rise much, or not fast enough, over the years. This will also take into account any features that were included in building the home – for example, if technology was installed, the value that they contribute to the house may not hold as new technology obsoletes them.
Should You Build or Purchase a House?
The idea of the perfect home, where individuals and families can kick off a new chapter in their lives, is different between people. Some will prefer molding a house according to their needs, some will want to move in as quickly as possible, and some will need to live in a specific area, among many possible scenarios.
The five factors will determine whether the situation calls to build a purchase a home. The decision should also involve a well-thought-out process instead of an impulsive move and should take into consideration advice from trusted experts in the real estate industry.
The final decision, however, will always remain with the future homeowners, so choose wisely.
Whether you plan on buying a house and lot or a vacant lot, check out available properties for sale listed on Lamudi.
Sources: Realtor, Investopedia
Read our previous journal for more features.
