Should I buy an existing house or build a new house?

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If you're tired of your existing living situation or have experienced some life event that requires moving, you have a choice between buying a home or building a new home. It's a great question, and one that requires some serious thought, but what are the issues?

In this article, I'll explore a few of the issues I have seen people deal with and how they made their decisions in the hope that you can gain some insight from their experiences. The names have been changed so as not to embarrass anyone.

Jane's story

Jane is a single woman in her fifties who is very particular about the look and feel she wants in a home and about the location. She wanted a rural location but with the convenience of a neighborhood with an association and neighbors. Ideally, those neighbors would be close enough that she wouldn't feel lonely but far enough that they couldn't look in her windows.

Jane knows what she likes when she sees it but has a really hard time visualizing something in a drawing or a sketch or how a particular finish like a paint color or wood floor is going to look based on a small sample. She had a pretty flexible budget, which meant she could afford to buy what she wanted.

She decided to build a custom home, which in hindsight was probably a mistake. She really struggled with all the decisions because she couldn't visualize the finished product, and no amount of artist rendering or 3-D imaging can capture every nuance. While she ended up with a beautiful house that's the envy of the neighborhood, she wasn't really happy with it. The whole building process was stressful. She made over 80 changes during construction that were expensive and added months to the process. This is a case where buying existing might have been the best choice.

John's story

John is a husband and a father of seven who works hard to provide for his family, while his wife, Mary, works even harder home-schooling the kids and keeping the home in top condition. As the kids grew, the personal space and home-schooling space requirements started to add up to more than their existing house could provide. They also wanted space around them—for privacy and quiet—that doesn't exist in a typical neighborhood.

Added to that, John's elderly mother lived with them and really needed her own space, even if it's small. This is the case of a family who had a clear-cut problem to solve. While the requirements were well-defined and John and Mary were highly motivated to solve the living space problem, there was simply nothing already built that worked.

Because they were motivated to solve a particular set of problems and knew from experience what kinds of spaces would meet their needs, they were great candidates for a custom home. They were able to build a very cost efficient, large, and nicely equipped house on their land. The home included a full apartment for John's mother, complete with a kitchen, laundry room, garage, and separate entry. The main part of the home included a laundry room large enough to accommodate two washing machines and two dryers, a kitchen with a double refrigerator, and a huge home-schooling room upstairs.

These are just two examples of situations that called for different solutions based on the specific needs and mindset of the people involved. If you're considering the question of building new or buying an existing house, think about the following questions:

  • Am I a visual person? If so, am I comfortable with my ability to visualize what a custom home will look like based on plans and color selections, or do I feel confident only when I can see the finished product?
  • How well-defined are my requirements for my new house? Am I moving just because I want a particular location, where many options are available, or am I trying to solve a specific problem that I'm unlikely to solve with an existing house?
  • How decisive am I? Would I rather make one big decision (like buying a house) or many small decisions (like what color paint, countertops, carpet, brick, stain, tile, etc.)?
  • Would I get stressed out if I had to worry that the placement of the kitchen light switch might turn out to be better one foot to the right, but I won't really know until I move in? (If so, please don't build—you'll drive yourself crazy!)
  • When I walk through houses that are for sale, do I pick apart every detail, or do I overlook small things to think about the big picture of how my family will live? (If you see every defect and blemish and think to yourself "I would never accept that in my house," building a new house might drive you crazy.)
  • Have I always dreamed of creating a certain environment for my family, one that is unique to our needs and the experience we want to have?

The decision to build or buy existing is not one to take lightly. It's not just about the finished product, but about the process and how your temperament is likely to affect the experience. Your emotional state is at stake, so take the time to think through your options.

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