One big question which many first-time homebuyers face is this: Should you buy a home that’s move-in ready, build a home from the ground up, or choose a place that’s not quite right and renovate?
While there’s not one right answer for every buyer, here are a few points to consider if you’re looking to purchase your first home.
Buy It: Pros & Cons
There are numerous pros to purchasing a home that’s already built and more or less meets your needs. You won’t need to wait around for a property to be constructed, nor will you need to invest the time, money and energy in significant renovations. Many people also appreciated the opportunity to be in an older home with character, or which has been smartly fixed up by a previous owner.
Buying a home that’s ready to move into is a solid choice – but it means that as the homebuyer, you often need to be flexible. You might not find the perfect home, in the perfect neighborhood, for the perfect price, so be prepared to compromise. Go into your homebuying journey with a list of musts, wants and nice-to-haves; and once you start viewing homes, keep checking in with your top priorities.
Another factor to consider when buying a move-in ready home is that you’ll likely have competition. This is especially true in a low-inventory market, which means you’ll need to be ready to move fast. Get pre-approved for a mortgage before you start looking at homes so that if you do find the perfect property, you can quickly submit a competitive bid.
Build It: Pros & Cons
Building a home can be a great experience if you know what you want and you’re willing to put in the effort and funds to get it just right. Depending on your level of involvement in the construction process, you’ll usually get a say in design, materials, fixtures and appliances. And of course, because the home is brand new, you won’t find any less-than-charming quirks that sometimes come with an older house, such as foundation issues or a deteriorating roof.
Do be aware that closing on a new construction is generally more expensive than buying a move-in ready home. Moreover, be prepared to start making payments up front, even if it takes multiple months for the home to be finished – which could mean you’re paying for your new home and your current residence at the same time. Another budgeting aspect to be mindful of is how much you’re willing to spend to customize your new home. While it’s tempting to go big on every detail simply because you can, make sure you’re tracking it all as construction, fixture and appliance expenditures can add up fast.
Fix It Up: Pros & Cons
If a house checks most of your boxes but not all, another option is to buy and renovate. The advantages are that you get a home that more closely matches your exact needs, without completely building it from scratch. This is especially true if your issues with the property are aesthetic, but you like the overall structure and underlying engineering of the home. Renovating can also be a fun project, assuming you’ve got some existing knowledge in the area or you’re able to put in the time to learn.
A home in need of renovation should be less expensive than a property that’s move-in ready, but remember that repairs, redesign and redecorating can add major bucks to your home-buying budget. You can prepare for these costs somewhat, but it’s almost a guarantee that unexpected expenses will arise – so if you do go the fix-it-up route, add plenty of padding to your budget.