Purchasing a home is one of the biggest decisions you'll make in life. When house hunting, you face a huge choice—whether to buy an existing home or build a new one. Carefully examining the pros and cons of each option will allow you to make a more informed decision.

Read on to learn more about the costs of buying a new construction home vs. an existing one.

Personalization

When buying a new construction home, you can work with the builder to select countertops, floors, paint, and finishes. Compared to an existing home, you will have to hire somebody for the work or attempt to pull off one of those DIY Pinterest projects — and we’ve all seen how “easy” those can be.

Landscaping

With new construction, you must purchase the vacant land before paying to build the house on it. Most existing homes have already established trees plus front and back gardens to add to the outside appeal of the house. Think about it as a buy now or later type of situation. Everyone eventually wants that #1 neighborhood yard of the month award.

Smart and Efficient

Buying new means buying better energy-efficient appliances and building supplies — which translates into lower utility bills. New homes have better insulation and window technology than older ones. The improved insulation and more modern windows help keep new homes cooler in summer and warmer in winter. Hey Alexa, how much money am I saving?

What’s in the Budget

Overall, there are many pros and cons to both styles of homes. An older model will likely be more budget-friendly in the here and now. But, it can become a hassle when repairing and remodeling—or when replacing major equipment like an antiquated AC unit or furnace. 

That said, older homes tend to have bigger backyards. The extra space allows homeowners to do more outside activities without restrictions from Home Owner Association (HOA) rules.

Timing Is Everything

Buying an existing home is faster than building a new one, so consider timing if you need to move soon. Building a new home takes an average of 6 months, but you can move into an existing home right after signing.

Pros and Cons of Building a Home

Building a new home from the ground up allows you to customize the design and layout. However, it also requires more upfront planning and costs. 

A common question that arises when considering taking on a new home construction project is, "Is it cheaper to buy land and build a house versus buying one that’s already built?" The answer to that question depends on several factors:

Pros

• Full customization—You can personalize finishes, layouts, and amenities to suit your lifestyle.
• Brand new systems—Plumbing, electric, and HVAC will have the latest technology and therefore will provide higher efficiency.
• Modern design—Create an open, contemporary floor plan with the latest architectural trends.
• Energy-efficient—New building codes require better insulation, windows, etc., which will reduce energy bills.
• Warranties—Many new components like roofs and appliances carry extended manufacturer warranties.
• Pride of ownership—Ability to watch your dream home being built from scratch.

Cons

• Higher upfront costs—Land, permits, labor, and materials add substantial expense compared to existing homes.
• Lengthy timeline—Obtaining permits and undergoing construction means a 6+ month wait before moving in.
• Unforeseen delays—Supply chain, labor, and weather can all cause timeline extensions.
• Limited neighborhood data—It is hard to predict noise, traffic, and community in a new development.
• No track record—As a first owner, you’ll have no history of potential defects or problems in the home.
• Landscaping—Must plant trees, grass, and gardens from scratch.

Pros and Cons of Buying an Existing Home

Purchasing an existing house allows you to move in quicker and potentially save money upfront. However, inheriting an older home comes with some drawbacks to consider as well. Let’s look at both the positives and negatives.

Pros

• Faster move-in—Skip new construction delays and move in as soon as the contract is executed.
• Lower upfront cost—Avoid land, permit, and full-build expenses that come with new construction homes.
• Established neighborhood—Get a sense of community, traffic patterns, and noise.
• Proven over time—Prior owners have lived in the home and worked out any defects (hopefully).
• Turnkey condition—Often can often move in without taking on major remodeling projects.
• Motivated sellers—Existing homeowners are more likely to negotiate on price or terms.
• Landscaping—Mature trees and gardens already in place add curb appeal.

Cons

• Limited customization—Stuck with prior owner’s layouts, finishes, and style.
• Older systems—Plumbing, electric, and roof may need repairs or replacement sooner.
• Outdated design—Older floor plans often have smaller, closed-off rooms.
• Inefficient energy use—Older insulation and windows lead to higher heating and cooling bills.
• No warranties—No protection from defects versus new construction warranties.
• DIY or hire—More responsibility for renovations versus a custom new build.

Cost of Building a New Home

Constructing a newly built home involves various upfront expenses. The regional real estate market, custom designs, and luxury finishes can all impact the final price. Below is an overview of typical construction costs for building a 2,000-square-foot home:

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Cost of Buying an Existing Home

Purchasing an existing house might seem more affordable than building a new one. However, buyers should budget for surprise repairs or replacements because the previous owner's maintenance history is unknown.

Here are some average costs you might encounter when purchasing an existing home:

New vs. Existing: Which Home Is More Affordable?

So, do you want something new and shiny, or are you looking for that charming, established house? Both have major pros and cons and factors to consider. 

Choosing the right lender is just as important as selecting the right home. Let Baton Rouge Telco help you get into your dream home faster.

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