Buying a home is no split-second decision. There is a lot of thought that has to go into choosing the right house. Finding a turn-key home can be exciting until you realize you may have to sacrifice much of your wishlist to afford it.
Sometimes, it's not fun to live in a home designed for someone other than yourself. You have a vision. And something as permanent as a home should be exactly what you want.
So how can you achieve this?
Well, there are typically two options. You can opt for a newly built home that you can design to fit your wants and needs. Or, you can choose a home that isn't even remotely close to being turn-key and fix it up into exactly what you imagine.
It can be challenging to know which option is better for you. You may have many questions like "What are the hidden costs of a new build?" or "What policy should owners of older homes consider?"
There are many factors to consider on each end before deciding if a new build or fixer-upper is right for you.
Buying a New Build Home
A new build is undoubtedly flashy and exciting. It's a nice feeling knowing everything in your home will be designed around you. However, there are some cons about new builds people may not realize.
Pros of a New Build
Your home will be a blank slate. This is nice for people who have particular wants out of their homes. Since you can pick and choose almost every aspect, you can be sure everything is designed exactly to your liking.
The home will be move-in ready when you arrive at it. Once the construction is complete, all you have to do is bring your belongings and settle into life.
Newer homes are typically more energy efficient than older constructions. With new technology in insulation and heating and cooling options, you will reduce your carbon footprint with a newly built home.
Your upkeep and maintenance will likely be minimal in a new build. Everything will be unused, meaning you have a very slim chance of anything breaking or going wrong for at least the first few years.
You will likely be able to get lower home insurance rates on a new build. Companies will typically see a newly built home as low risk since everything should be in pristine condition.
Cons of a New Build
You can't forget the other costs associated with building new. Besides paying for the build itself, you will also have to pay for the land the home sits on, the construction of a driveway, and, depending on the location you choose, the cost of a septic tank and well installation.
The home you see when you tour likely won't be the home you get for the starting price point. Upgrades can be costly in new builds. Keep in mind that if you have specific upgrades you feel can't compromise on, the cost of your build may skyrocket.
Building a new home doesn't happen overnight. Many tasks must be done before the construction can even begin. This is something to consider before building new. If you are in a rush to get out of your current location, you can't expect a new build to be ready for you.
You shouldn't expect any wiggle room in the cost of your new build. You're not haggling with a seller, so they will not be willing to work with you on price. The cost they give you is what you should expect to pay, so be prepared to spend the amount you're quoted, if not more.
Buying a Fixer-Upper
Some people may overlook fixer-upper homes. They see nothing but work, when in reality, they could be someone's dream home with the proper love and care. Plus, they usually include a ton of unique features you will never find in a newer build. They do, however, come with their cons as well.
Pros of a Fixer-Upper
You will typically get more space for less money when you purchase a fixer-upper. The purchase cost will be much lower than a fully renovated home, leaving you more money in your budget for renovations and other aspects of life.
Your options can be endless when it comes to a fixer-upper. Since you are already renovating, there's no reason you can make adjustments, so the house better suits your needs. If the floor plan isn't open enough, knock out a few walls. If you don't like the layout of the kitchen, remodel it.
You likely won't find yourself in a bidding war over a fixer-upper. It takes the right kind of person with the right kind of mindset to see the light at the end of the tunnel. Most people will likely opt for a more turn-key option, leaving you with room for bargaining in the asking price.
The charm of older homes is unmatched. They contain so many features you won't be able to find on a new build unless you want to pay an arm and a leg for them. With features like crown molding and multiple ornate fireplaces, older homes are filled with things that make them unique. Some home improvements can even reduce stress.
Cons of a Fixer-Upper
When renovating a fixer-upper, you run the risk of unexpected problems occurring. Even with a home inspection, some problems may be unseen until renovations or living in the home happens. It can be somewhat of a gamble, and unexpected costs could cut into your budget.
The timeline of a fixer-upper may be off-putting to some people. It can take quite some time to get the home completely renovated and exactly where you want it. While you wait for that, you'll likely be living in a construction zone until everything is complete.
A fixer-upper can have high costs if you are not handy yourself. Paying a company or contractor to do the work in your home may leave you with little money left in your budget. Unless you know how to do the majority of the work yourself, you may find yourself shelling out big money for the renovations.
You may have a harder time finding insurance for your fixer-upper. Many companies will see a home that has been abandoned or is a foreclosed property as a big risk to insure. If you are simply renovating a home that is outdated, you will likely struggle less. However, a home that has been left to crumble will give you some difficulties when it comes to insurance.
Choosing the Right Home for You
It can be almost impossible to find a home that meets every want you have. Even with a new build or a complete renovation, some wishes are simply out of budget or too difficult to construct.
There are many differences between a newly built home and one that needs some TLC. However, both will allow you to get pretty close to the home of your dreams. It all comes down to which one you feel is a better fit for your budget and lifestyle.
Alexandra Arcand writes and researches for the insurance comparison site, ExpertInsuranceReviews.com. She recently purchased a home and went back and forth between buying a new build and a fixer-upper to create the home of her dreams. She decided on a fixer-upper and has loved bringing out the beauty of her new home.
