Building vs. Buying a Home

Thinking of building vs. buying a home? There are many factors to consider, such as your timeframe, the location and design of the house. Let’s take a closer look at the pros and cons of each option.

Benefits of Building vs. Buying a Home

Customization

When you build a home from scratch, you choose everything from the location to the floor plan to the finishes. You move into the house of your dreams, tailored to your tastes and how you want to use the space. No need to plan updates or renovations; you get to enjoy your customized space right from the start!

Control Over Costs

Building vs buying a house gives you more flexibility over costs. You choose the materials at each step of the process, and you decide where to spend more money and where to cut back. For example, you can go all out on a chef’s kitchen if that’s key to your enjoyment of your home and leave the basement unfinished as a future project.

Energy Efficiency

Newer homes are more energy efficient. Modern builds keep homes comfortable and utility prices low with features like low-e windows, foam insulation, and high-efficiency HVAC systems. Note that you can get tax credits and rebates for some energy-efficient home features.

Environmental Advantages

If you build vs buy, you can choose materials that are free of toxins and sustainably sourced. This lowers the impact on the environment and ensures your home is a healthy living space. You can also install features like solar panels, tankless water heaters, and a greywater recycling system more easily when building vs buying a home.

Fewer Repairs

A new build won’t need repairs to major systems or appliances for quite a while. Fewer repairs means more money you can put toward your mortgage or spend on things like travel and entertainment.

Less Market Competition

Housing inventory in Canada is critically low, and competition among buyers is high. Building vs buying a house in Canada means you don’t have to worry about bidding wars or waiving contingencies to get the home of your dreams.

Downsides of Building vs Buying a Home

Longer Timeline

A new home can be bought in a matter of days; a build takes an average of seven months, but can be much longer. During that time, you will need to spend time on the planning, visit the build site repeatedly, and pay for housing elsewhere.

Unexpected Costs and Delays

Your contractor will provide you with an estimate, but unexpected expenses often arise, pushing budgets up. Delays are extremely common and can increase your timeline by weeks if not months.

More Time Consuming

Building a home from the ground up is a lot of work. You have to choose a contractor, negotiate terms, decide on the layout and design, and choose cabinetry, fixtures, and finishes. Homeowners also need to visit the build site regularly and be in constant communication with the contractor. Time is a major consideration in the build vs buy decision.

Less Negotiating Room

Beyond the original negotiation with your contractor, you won’t have room to negotiate the cost of the build itself.

That said, choosing materials and finishes yourself can save you a lot of money. Do your research, and you can find ways to keep expenses down. In the build vs buy debate, building is more work, but offers key opportunities to save.

Benefits of Buying a Home

More Predictable Costs

Buying a home is often less expensive than building one, but this depends on location and market conditions. As long as you have a home inspection and a thorough title search, you won’t have the unexpected costs that often arise with new builds.

Established Location

If you want to be in an established community, it is much easier to find a home for sale than it is to find vacant land you can build on. Established neighbourhoods also have mature trees, well-thought-out infrastructure, and nearby amenities like parks and schools.

Faster Move-In

Your timeline is a key factor in the build vs. buy decision. If you buy a home, you could close in as little as 30 days; if you build, it will take 6-9 months if everything goes to plan. With delays, it can take much longer.

Fewer Decisions and More Convenience

Building a house involves numerous decisions, from the location to the light switch plates. If you buy instead of building, all you have to worry about is the move itself. Although you may want to make changes to the space, you can do it at a more leisurely pace.

More Negotiating Room

When buying a home, you can negotiate for a lower price, closing costs, or necessary repairs. If you’re buying land and building vs buying a house, you can negotiate on the price of the land, but most other costs will be as per your contractor’s estimate or higher.

Disadvantages of Buying a Home

Limited Customization Options

With an existing home, there’s only so much you can change. Things like paint colours and trim aren’t difficult to match to your taste, but the layout of the home can’t be changed without major renovations. If there is a particular feature you are looking for in a home, this gets even more challenging.

House-Buying Stress

In a seller’s market, finding the right home at the right price can be time-consuming and stressful. You might face a bidding war, rejected offers, and placing bids on multiple houses in a serial fashion. Competition in low-inventory markets can also drive prices up, and you could spend more than you originally planned.

Maintenance Issues

Older homes will need repairs and upgrades sooner than a brand-new one will. If you buy a home built before 1970, it may also contain asbestos or lead paint, which will need to be dealt with immediately. Regardless of the type of home you purchase, getting a home inspection is always recommended.

Both building a home and buying one can be viable options for a prospective homeowner, and it can be challenging to decide which is better. If you carefully consider each factor and consult with an experienced real estate agent, you can be confident that you will make the best choice for your budget and lifestyle.