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Owning your first home can be one of the most exciting adventures of your adult life. However, with that excitement also comes a plethora of stressful decisions to make. While the home-buying process involves several important choices, one of the very first decisions buyers need to make is whether to build from scratch or shop for an already established home. If you find yourself in a pickle when it comes to choosing the best option for your personal needs, you’ve come to the right place. Today, we have a look at the pros and cons to both sides of the homebuyer’s coin, so sit back, relax and continue reading to find out more.
Building Your First Home
Building a new home can be a great way to really customize and tailor your space to your specific needs. When it comes to building a new home, you have two options to choose from – buying off the plan or investing in a house and land package. Both of these options are very similar and are used for those wanting to own a new build property. However, the key difference between the two is a difference in ownership.
When you purchase off the plan, you don’t own anything until the building process is complete and settlement happens. On the other hand, if you choose a house and land package, you purchase and own the land right from the get go and proceed to work with homebuilders to gradually construct your dream home.
Pros Of Building Your First Home
Customize Your Home
One of the biggest perks of building your own home is the level of control you will have over every component and element in your home. If you build a house from the ground up, you’ll get to personalize the details to suit your lifestyle and tastes. Unlike buying an already established property, you will be able to choose the style of bricks, flooring, tiles, carpets, taps, door handles and even where your power points and lights are placed.
Save On Stamp Duty
In most cases, buyers are required to pay a stamp duty on their home purchase based on the value of both the land and the house. However, when you opt to purchase a house and land package, you only pay stamp duty based on the value of the land. This means you don’t have to fork out stamp duty on the house you build, which could lead to substantial savings. On the flip side, you’ll be paying stamp duty on both the land and house should you opt to purchase an established property.
Less Maintenance
Since new homes are built to meet current building codes and have up-to-date technology, chances are you won’t have to worry about big repairs or heavy maintenance issues in the first few years of living in your new home. Furthermore, most builders offer a builder’s guarantee that can last anywhere between 5 to 50 years. New properties are also likely built to a higher energy efficient standard which may result in lower running costs.
Cons Of Building Your First Home
Longer Wait Times
One of the biggest downsides to building your own home is downtime. It can take anywhere from 6 months to 2 years for your build to complete, not including the planning and approval stages. This means you’ll likely have a relatively large gap in living arrangements and will need to be able to cover the cost of renting until you can move into your newly built house. On the flip side, most established homes are ready to move in within a matter of weeks.
Unexpected Costs
Another factor to consider when building a new home is the unexpected costs that may arise due to factors such as timber shortages, soil quality, upgrades, modifications and contour surveys. As such, we always encourage setting aside a contingency budget for delays and unexpected issues. If you’re on an extremely tight budget with little to spare, purchasing an established home may be a better and safe financial decision.
Smaller Land Area
New land lots can be smaller (especially in up-and-coming neighborhoods), so you might get a larger land parcel with an established home. If a good-sized front and backyard is important to you, established properties might offer better options.
Harder To Negotiate Prices
Haggling is incredibly common in the resale market, but not so much in the world of house and land packages. In most cases, there isn’t a lot of leeway on closing costs or purchase price with a builder—unless your real estate agent brings a creative mind to the negotiation table. Either way, chances are you’ll get more bang for your buck when purchasing an existing home.
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To Build or To Buy?
As you can see from above, the choice to purchase an established property or build your own home from scratch is one that is incredibly subjective and highly dependent on your individual wants and needs. As a general rule of thumb, we always encourage looking into established homes that are available in your price range, and comparing them to the type of home you can afford to build.
Either way, working with a qualified professional—whether that’s a trustworthy real estate agent or home builder — will help to ensure the process goes as smoothly as possible. May the blessings of happiness and good health be filled in your new home!
