Build or Buy?

New year, new you, new…home? If this is the year you are getting the kids their own rooms, or making sure you have that man cave or she-shed, we’re sure the following question has come up: Do we build or buy? Here’s the answer: it depends on what’s important to you. In this article we are going to quickly go over what home purchase vs. building processes look like (let’s be honest, it’s a lot of paperwork no matter what) and then dive into the valuable tool of listing pros and cons for each process.

Buying Process: Hopefully you are working with a realtor. We highly recommend it (and have referrals for you). After receiving a pre-approval from your lender (this is a high level look at your buying power from which the lender can confidently predict you will be able to afford $XXX,XXX of house), you and your realtor start the process of checking the market for a home that meets your non-negotiables (think that extra bathroom or office) within your budget. You then go look at those homes to see if they will work for you IRL.When you find one, and make an offer, you hopefully come to what’s called an accepted offer and the contract is sent to a neutral third party, known as escrow, to handle the rest of the transaction. Inspections, and subsequent repair addendums (additions) to the contract ensue, appraisals are ordered, and hopefully come in at value, and within about 45 days (typically) you have the keys to a home that meets your needs!

Buying Pros: Buying can put you into a home in a relatively short amount of time. If you are moving to a new area or are up against the end of a lease, this can be very important.

Buying Cons: Many times budget restrictions can conflict with housing needs, leaving you in a less than move-in ready home, leading to remodels or additions. Luckily, we do those so this really isn’t too much of a con, but it’s worth noting.

Building Process: You should probably work with a realtor for this too, to make sure you find a piece of land suitable for building the home you have in mind. Concurrently, it is good to be working with a contractor from the beginning steps as well (hint hint). Construction loans aren’t that much different from a primary residence loan from a consumer standpoint, but finding a lender who does construction loans regularly is advised because they are different on the back end (we have referrals for lenders too). Item to note, there is typically a larger down payment than the 3-5% we usually hear about on primary residence loans. So far, the processes are similar; working with a realtor and lender (and a contractor, let’s say RBR Construction) and you are looking at properties. Your realtor and contractor will work with you to find a suitable property and the process remains the same for the offer and opening of escrow account.

You will need to really trust your contractor (RBR Construction) to work with you on a budget because you will need that for your lender before you can close.

When you do close and construction breaks ground, be prepared to be flexible. Permitting can become an unforeseen issue, depending on how fast the county is moving through applications and supply chains can ebb and flow (as we have seen in the last couple of years). From the time you break ground, construction can take anywhere from 6 to 16 months, although RBR usually works within the 8-10 month timeframe. 

Building Pros: Custom built to meet your needs and often exceed your expectations, building your own home can provide peaceful, yet functional areas; reducing stress and increasing productivity. You get to choose your materials and build to your own style. Additionally, materials, because they are typically new, are environmentally friendly, not only to the Earth, but to you and your family (think: not worrying about asbestos, or other toxins that can live in the structure of an older home). Despite a larger down payment, pricing is comparable to purchasing a single family home (consult your lender to fact check this, always, no matter who says it).

Building Cons: It takes 2-3 times longer to build a home than to purchase one.

We love making our clients’ housing dreams come true–whether that’s renovating a historical home, building out an addition, remodeling the interior and/or exterior, or building it from scratch. If you are debating which path is the right one for you and your family this year, or even a couple years down the road, please reach out to us. We would love to walk you through a more in depth pros and cons discussion and, ultimately, give you the best advice we can for you and your family.

Talk soon!

RBR Construction “Built On Integrity” CL202768 RBRCOC*816MJ

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