There are two primary advantages to buying an existing home: convenience and cost. Once you are pre-approved by your lender, you can shop around, pick out a home and make an offer. As a qualified real estate agent, I can streamline the process by helping you find appropriate properties, guide you through negotiations and assist with the paperwork. Once your offer is accepted, you may be able to close and move in within a month or two.
Even though the process involves numerous steps – such as financing, viewing homes, making offers, home inspections and closing – the convenience of being able to move in right away is compelling enough for many people to choose an existing home over a build. This may be especially true for buyers on a tight schedule, such as those relocating for a new job or whose children will be starting at a new school.
Then there’s cost: In many (but not all) cases it is cheaper to buy an existing home. According to data compiled by the National Association of Home Builders, the median new home price in 2015 was $282,800, versus $208,900 for existing homes during the same year. Depending on your target real estate market, prices for existing homes may still be quite favorable in the aftermath of the financial crisis and housing bust that significantly lowered real estate prices across the nation.
Another reason an existing home may be a better option is if you would like to be in a particular established neighborhood – near work, school, friends and/or family. Odds are, too, that the home will have mature landscaping, so you won’t have to worry about starting a lawn, planting shrubs and waiting for trees to grow. And if you want to live close to town, your best bet will be an existing home since most, if not all, of the land will have already been built upon.
On the flip side, the biggest disadvantage in buying an existing home may be that you won’t get exactly what you want. You may not be in love with the floor plan, may wish that half bath on the first floor were a full bath or that there were another bedroom on the main floor. Older homes in particular may be functionally obsolete, and no longer meet the needs of most buyers. For example, an otherwise beautiful four-bedroom house may only have one bathroom, or the kitchen may be too small with no room for expansion. Unless you find an existing home that has exactly what you want and is in perfect condition, you will have to spend additional money on remodeling, repairs, decorating and/or landscaping. These additional expenses should be factored into the overall price, especially when choosing among various properties or comparing the cost to building your own house.
Read more: Should You Buy or Build a Home? | Investopedia