The Difference in Building a New Construction Home Vs. Buying An Existing Home

TL;DR

Should you build or buy a home? This video explores the differences, including decision-making, customization, warranties, and closing costs.

Transcript

I heard you're on the fence. You're thinking about building a new home, but you're not sure maybe you want to buy a house instead. I'm going to talk to you today about the differences and building versus buying an existing home from a real estate lawyer's perspective. I'm Tiffany and I'm a real estate lawyer in Mooresville, North Carolina. And I lo... Read More

Key Insights

• 🫡 Building a home can involve purchasing a spec house or finding a lot for customization, allowing for more input in the decision-making process and customization.
• 👪 Buying an existing home means relying on the seller's representations and property disclosure, with limited leverage to negotiate repairs.
• 👪 Building a home offers the advantage of a brand-new property with warranties, while buying an existing home offers the advantage of a faster process.
• 👪 Building a home can involve multiple closings and higher closing costs compared to buying an existing home.
• 🧑‍🏭 The decision between building and buying depends on factors like tolerance for waiting, customization preferences, and financial considerations.
• 👪 Building a home requires making numerous decisions, which can be overwhelming for those unfamiliar with the process.
• ✊ Buying an existing home poses the risk of hidden issues or repairs, with the buyer assuming responsibility without much negotiation power.

Questions & Answers

Q: What is the difference between building and buying a home?

Building a home involves purchasing a spec house or finding a lot to customize, while buying a home means purchasing an existing property as-is, relying on the seller's representations and disclosures.

Q: What are the advantages of building a home?

Building a home allows for customization, a brand-new home with warranties, and potential involvement in the decision-making process.

Q: What are the disadvantages of building a home?

Building a home may take longer than buying an existing home, and decisions can be overwhelming, especially for first-time custom home builders.

Q: What are the risks of buying an existing home?

Buying an existing home means taking on any issues or repairs since the purchase is generally "as is." The buyer's leverage to negotiate repairs may be limited.

Summary & Key Takeaways

• Building a new home can involve purchasing a pre-owned lot, known as a spec house, or finding and customizing your own lot. The builder makes most decisions, but the buyer can have some input in finishes.

• Buying an existing home means relying on the seller's representations and property disclosure. The buyer must conduct inspections and negotiate repairs before closing, without much leverage.

• Closing on a new build may involve multiple closings, including on the lot, construction loan, and permanent loan, leading to higher closing costs compared to buying an existing home.