Purchasing a home is a major life decision and a serious investment. One of the first choices to make is whether buying new construction or an existing home is the best option. This article will compare the process of buying new construction vs. an existing home. Continue reading to learn about the cost of building a house vs. buying or renovating an existing home, and whether it is better to buy a home or build one with Keystone Custom Homes.
Is It Cheaper To Buy or Build a House?
When comparing the cost of building a house vs. buying an existing home, consider all variables associated with the final price. On average, buying an existing home is cheaper than building a new home at the time of purchase, but the cost at signing doesn’t account for the ability to customize – an unquantifiable value – and the long-term financial impact of new construction vs. older homes.
Calculating the average cost of a custom-built home is more difficult than an existing home, as each build is unique and customized to personal preference. Some home builders will offer a cost-per-square-foot pricing model. Keystone Custom Homes doesn’t use this model because the cost of a basic homesite is included in all pricing!
Typical costs of building a new home include:
- Land costs: These are costs that go into preparing land to be built on.
- Basic home costs: These costs cover basic foundation, roofing, siding, and interior features included in the base price of a new construction home.
- Option costs: These costs go toward options that allow you to fully customize your home beyond the features included in the base price.
When buying an existing home, the property is sold as-is or with a few minor repairs as dedicated in the offer. Additional investments are required for remodeling, renovations, and decorating, where new construction allows specific customizations for a one-of-a-kind home built for longevity.
Energy Savings of Building a Home
Energy-efficiency is an important factor when comparing the cost of building a new house vs. buying an older home. Because they’re built with durable technology and equipped with Energy Star products, new construction homes are 70% more energy-efficient than resale homes.
Not only does an energy-efficient home leave less of a carbon footprint, it also helps lower monthly utility bills. Aged windows, inefficient lighting, and outdated appliances found in older homes are often the source of hidden energy costs that drive utility bills through the roof. Keystone Custom Homes’ Energy Plus homes are constructed for maximum insulation and include energy-efficient appliances that make them 40% more energy efficient than other new homes!
Location Customization: Is It Cheaper to Buy Land and Build a House?
Outside of existing new home communities, Keystone Custom Homes offers the option to build a new home on your own land. This is the most flexible way to build a new home and offers maximum customization but is more expensive than both a traditional new construction home and an older existing home.
The typical price to build a new home on your own land includes:
- The cost of the lot
- Site work costs to prepare the land for construction
- The house cost
In addition, the buyer must cover the expense for a percolation test to determine whether the lot is buildable. In the event of a negative test, additional costs will be tacked on in order to move forward with construction. For more information about building a home on your own land, visit Keystone Custom Homes’ On Your Lot FAQ page.
Renovating an Existing Home Vs New Construction
When deciding whether to buy or build a house, renovating an existing home offers the option of customization at a lower price than a new construction home. However, renovations aren’t always straightforward and may end up costing more in the long run. Consider the following costs of renovation vs. new construction.
After finalizing the purchase, homeowners are tasked with planning renovations – a tedious and often time-consuming process before any upgrades are made. The planning phase of renovations includes:
- Establishing a budget
- Determining what renovations to make
- Researching and identifying local restriction and building codes
- Contacting and recruiting a team of professionals to help complete the renovations
Remaining within the established budget is often a challenge, as hidden costs tend to add up in various forms. Because inspectors can’t move anything during a home inspection, costly issues that weren’t originally identified can increase the renovation bill. Rotted foundation wood, asbestos issues, and electrical or plumbing systems that don’t meet code are examples of roadblocks in the renovation process that delay progress and drain funds from your budget.
The price of new construction at signing is higher when choosing a new home vs. an old home, but renovation costs can match or exceed new construction in the long-term. Buying new construction is more straight-foward and you can customize the home to your exact preferences vs. completing laborious renovations on an older home. To see how easy it is to start a new construction home versus starting a renovation, visit the Building Process page.
Is It Better To Buy A Home or Build a New Home?
So, is it better to buy a home or build one? Building new construction offers an array of benefits and the final price can be in the same ballpark as buying an existing home after renovations. The upfront cost of new construction includes full customization – with thousands of options to choose from – diverse location options, and the ability to build on your own land. Utilizing energy-efficient technology and appliances, a new construction home is built for durability and longevity.
Learn More About New Construction vs. Older Homes from the Keystone Custom Homes Team!
Coming to a decision between the cost of building a house vs. buying an existing home can be difficult. If you’re struggling to come to a final verdict, the Keystone Custom Homes team is here to answer any questions you may have. To talk with a team member, call 717-368-9831, chat with one of our online advisors or fill out a contact form.