Building a New Home Versus Buying an Existing Home
Building a New Home Versus Buying an Existing Home
Recently my nephew and his wife approached me and asked my advice on whether it is better to buy an existing home or whether they should consider building.
A great question, and it got my mind working on which way they should go.
I asked them if they had looked at any existing houses and if they had, did they find one they were leaning more towards making an offer? They had looked at quite a few but they all seemed to need something. They said they did like one of the houses they looked at, but it was 11 years old and they noticed that it would need a new roof now or would need one in the very near future.
They wondered how much does a new roof cost.
Well not knowing the size, pitch or any of the particulars I hazard a guess and said $12,000 to $15,000 depending on a few things I would need to know.
I think they hit the nail on the head with that question.
But the roof is only one element of several elements that make up a house.
Existing homes could need more than just a new roof…
What age and condition are the other elements such as the furnace and central air? The windows, flooring and plumbing fixtures all can be a concern.
What will need to be replaced, when and at what cost?
Let’s say the roof on that existing house will have to be replaced in three years. They will need to come up with $12,000 to $15,000 for a roof replacement in only three years.
Had they thought about where they would come up with the money in only three years?
I asked them how old is the furnace? They said everything in the house looked to be original to when the house was built around eleven years ago.
So they thought the heating and air conditioning was 11 years old.
“Did you look at replacing the furnace and central air?”, I asked them.
Because 11 years ago the efficiency of the furnace and especially the central air was very low and the life expectancy could be as short as 15 years or so.
No they said, they hadn’t thought of it to even consider it.
Of course their next question was what will it cost to replace those? To replace the furnace and the central air as well as the hot water heater (all should be replaced if you are considering replacing the furnace) would cost around $10,000 – $15,000. That is based on you replacing it with a high efficient system like the one you would get if you built a new home today.
I then asked what kind of shape were the windows in, and what kind were they?
They didn’t know the brand, but they were double pane glass and a couple of them had moisture between the panes. Not knowing the brand or if there might be window warranty, they could try and get some help on. So I didn’t mention whether that they should replace them or not.
I did mention to them that with a new home you would get maintenance free, high efficiency, tilt-out, double hung windows that meet safety and energy codes. They will have to decide if spending 5,000 to 10,000 for replacement windows in the existing home would be necessary.
“And what kind of flooring is in the house?” I asked. Carpet throughout the house except the bathrooms and kitchen, the bathrooms and kitchen had vinyl sheet flooring.
How did the carpet look? Were the previous owners neat? Did they have pets?
They didn’t know.
I told them, “It’s important to know.” You don’t want to move into a house and then start noticing strange smells and carpet stains that weren’t noticeable before you bought the house. Again the question, how much to replace?
Just guessing I would say around $10,000 to replace the old carpet with new carpet.
I did mention that in today’s market most people who are building new, move away from so much carpet and want hardwood floors and ceramic tile throughout and if they do get carpets it’s usually limited to bedrooms or a formal living room.
People today are going away from so much carpet. They hold so much dust and dirt and because they don’t want to live with nasty stains and smells that everyone inevitably get living everyday over top of carpets. New home owners say one of the best benefits of building new is that no one else has lived on their new flooring.
Look at all major elements of an existing home when comparing new vs. existing.
So when you are comparing an existing home with building a new home take a look at all the major elements of the house.
What shape are they in? Then you should add up the cost to replace all those items and then ask yourself:
“In a few years when I do need to replace those items, will I be able to come up with the tens of thousands of dollars I will need?”
What happens if in one year the furnace breaks and needs to be replaced, but then the following year the roof is starting to leak and it needs to be replaced. How many different loans will you need to maintain that used house?
That is not even mentioning the hassle of living in the house while it’s having those repairs done. Usually not a day or two either, it’s weeks and weeks of hassles.
So when you compare owning an existing home to one you just built as far as I am concerned, there is no comparison. I believe that saying “the older the home is, the bigger the money pit will end up being”.
A new home will bring you 15, 20 or even many more years of hassle free living.
Live Hassle Free and Build New!