Building vs. Buying A Home

Building vs. Buying A Home

After the pipes burst in the house that Will and Tina Alston were planning to purchase, the two thought twice about buying the 10-year-old home. Worried that they would rack up repair costs for the modern, but older, homes they were considering, the Columbus, Ohio, couple ultimately decided to build their dream home.

For Will, 29, an information technology consultant, and Tina, 32, a risk management associate for a regional bank, building provided them with the right amenities — a good price, more than 2,000 square feet, and a full basement. “We had to think about it for a couple of months, but we finally just took the plunge and said ‘Yeah, we think this might be the right fit,'” says Will.

The Alstons had specific desires for their home. Instead of the standard siding options the developer offered, the couple wanted stone facing. The two negotiated to forego the typical porch and fireplace and instead opted for the deluxe master bath with soaking tub, separate shower, and his-and-hers closets. In the kitchen, they added a gas line for the stove in addition to the electrical hookup to facilitate their love for cooking and increase the resale value of the home.

“If we bought a house that was 30 or 40 years old, we wouldn’t have gotten those options. Then we would have had to come in and basically renovate,” Will explains. Renovating an existing home can be a hefty expense; a simple procedure such as converting a room to a home office may cost thousands of dollars.

For the Alstons, builder discounts allowed them to build their house for virtually the cost of a pre-existing home. When researching developers, they found an Indianapolis-based company that was trying to cut into the Columbus market. The company was therefore offering homes of comparable size and quality for considerably less than the other major developers in the city.

In addition, features that were considered upgrades by other developers were offered standard, which also decreased costs. For example, their developer charged $3,500 for a full basement, which the other developers that the couple spoke to priced at $7,000 to $10,000. “At the end of the day we were saving about $15,000,” says Will.

Building has become a popular option for homeownership. More than 1.7 million single-family homes were built in 2005, totaling $51 billion in sales. If you choose to build, the most important factor is finding the right builder. Local homebuilders’ associations can help you identify builders in your area. Research their reputation and previous projects, and make certain they are insured and have the appropriate licenses and permits. You can also contact the Better Business Bureau to check their building record.

Still, Americans traditionally buy pre-existing homes. In 2005, sales surpassed $1 trillion for the 6.2 million existing single-family homes sold, according to the National Association of Realtors. With the attractiveness of constructing a new home and the familiarity of shopping for an existing one, the question remains: which is better, building or buying?

Although the decision is predominantly