Is it Cheaper to Build a Home or Buy One?

This week we will be talking about, “is it cheaper to build a home or buy one”? So stay tuned, and we’ll get right to it.

Hey guys! Randy here with NextHome Treasure Valley. I’m a Realtor® in the Mountain Home and Boise Idaho area. About a month ago, a friend of mine that I’ve been working with asked me if it is cheaper to build a new home or buy one. He had a company that he had been looking at online, and he asked me my opinion on it. I was honest and told him that I’ve never dealt with a new-build so let’s find out. So, we set up a consultation with an unnamed company here in the Boise area. They were pretty informative. The gentleman that we met with was going over some stuff with us and answering questions. Then I also researched it, so hopefully, we can answer some of that for you.

With new-builds, there are some plusses, and there are some minuses. So, with new builds, the house is going to be brand-new. More than likely, you’re not going to have a lot of repairs to do. You get to do the cool stuff like picking the cabinets, choosing the colors. Sometimes the builders are going to offer incentives. So, they might throw in appliances, or they might pay individual costs. But, usually, it does cost a little bit more. And the one thing that stood out from our meeting is, we were asking about the land and recommend land for us to look at? They said no, you would actually want to find land on your own, and then we can tell you if that land will work for us or not. You might have to get building permits in your area. So you want to do your due diligence on that. There was the cost of the building of that house, there was the land cost, and then there was a third cost of development costs. He said that that is standard for all the homes they build. You have to do the development part and pay for the house. So the attraction for when my friend was looking at the houses online was this price tag that they were showing, but you’re not seeing the full picture. You’re only seeing the outer shell if you will. So that’s something to keep in mind when you’re doing a new-build, and it can take up to 6 to 8 months before you get into the house.

Sometimes quicker, of course, and sometimes might even take longer. But the average is about six to eight months from what I am researching. Also, if you are a yard person, this may go one way or the other. Often, the yards are a blank canvas, so if you’re someone who likes to get out there and create for yourself, that might be what you’re looking for. You might want to see a bunch of dirt when you open the door so you can lay sod, you can plant seeds, or you can do whatever you wish to—trees, flowers, what have you. But to many people, they don’t want to deal with that part. So it’s all going to be about you and your perspective. Do you want to go out there and deal with that, or do you want to put in Astroturf? Whatever it is that you’re looking to do.

So now we talk about already lived in homes. They probably cost a little less, but there’s a good chance that you’re going to have to do repairs on those homes. Sometimes that’s okay. One of the clients I worked with in the past wanted a home that they could work on instead of a more modern home but had a little bit less square footage. They wanted the house to have square footage that they could work on. They were looking forward to doing the work. Many times, people watch Property Brothers and Fixer Upper and want to go out and do some of that work themselves. They weren’t looking to flip the home, this was their home, but the extra work didn’t bother them because that’s what they wanted. As you’re looking at older homes, even some newer ones, like within the last five years, might need some work. Usually, they are ready to move in already. New-builds often have to wait for 6 to 8 months, and you might be prepared to get in there now. So that might be a deciding factor in whether or not you want to build a house. There are also spec homes, and stuff like that. You can get in a lot quicker, but you would have to look into the details and see if it would still be like a new-build home. Often, pre-lived in homes already have appliances in them, so that might be a cost that you get to save. However, sometimes appliances are old. That same client I was telling you about had an old oven, and they had made up their minds before they moved in that the oven was being donated. It wasn’t something that they wanted to keep. So it could be a good thing or a bad thing. You might be walking into brand-new appliances that the past owners had bought, but maybe they don’t fit in the new house, and they’re not taking them. Perhaps they don’t want to bother with it. Sometimes past pets might be an issue, or someone smoked in the house before, and maybe you have allergies to either one of those. That’s something else you have to keep in mind with a pre-existing home, where a new-build more than likely you’re not going to have as much of that issue. It’s just like buying a car. If you purchase a brand new car, it’s excellent, but you pay a little bit more. It’s your car, and you’re the only one that’s been in that car. If you buy a pre-purchased vehicle, a lot of the bugs may have been worked out already.

So, just like anything, you want to see what works best for you and decide. So thank you for watching the video. If you have any questions, my contact information is below, so if you’re looking to move to the Boise area, you can get a free relocation guide go to TVGuide.RandyWRealEstate.com. Thank you so much. Have a great day, and thanks for stopping by.