Is it more cost effective to build or buy a house? That’s an age-old question potential homebuyers have difficulty knowing with certainty. Friends and family members offer their opinions and anecdotal accounts of others who bought or built. But getting down to brass tacks can be something of a challenge. By considering factors that influence price and employing the Douglas Residential Cost Guide, the price of building vs buying a house won’t remain a mystery.
Cost Considerations for Buying a Resale Home
Purchasing an existing home has become a popular choice because upfront costs are set in stone. Real estate professionals typically broker a deal between a seller and buyer. After adding up closing costs and peripheral expenses, homebuyers arrive at a static number. Only later do hidden expenses hit household budgets in too many cases. These are after-purchase expenses buyers would be wise to grapple with before the closing, such as:
- Maintenance and upkeep of older homes
- Replacing and repairing appliances
- Energy efficiency and utility bills
- Renovations and remodeling expenses
More than half of all people who buy rather than build anticipate investing in renovations. That’s primarily because existing dwellings were not necessarily designed to suit their lifestyle, family size, or layout preference.
Cost Considerations for Building a New Home
Building rather than buying a house removes the need to make necessary changes that add to the upfront cost. But securing a construction loan to design and build your dream home requires a greater understanding of today’s building costs. Not knowing how to arrive at an accurate estimate and worrying about overruns typically lead people to shy away from building. However, you can effectively input factors such as the following and get a reliable estimate with the right cost estimation tool:
- Building materials
- Energy efficiency
- Prevailing construction wages
- Application and permit fees
The Douglas Residential Cost Guide is a user-friendly online resource where even non-construction professionals can input the factors affecting building costs. The cost of items such as square footage, open floor plans, and luxury bathrooms can all be calculated. Using the Douglas Cost Guide can help you estimate a new home construction cost before enlisting contractors or discussing a mortgage with a lender.
Building vs Buying a House: Which is Better?
Although people in your orbit may have valuable opinions about the cost of building vs buying a house, there is no right or wrong answer. It’s generally in a buyer’s best interest to consider the real estate inventory in a desired community. Weigh the listing prices and types of homes against your preferred living space. Add up the cost of renovations and expenses that older homes typically require. Then, use the Douglas Residential Cost Guides to estimate the total cost of building your dream home.
Which is better? You can’t know until you’ve conducted thorough due diligence and understand the true cost of building vs buying a house.