Should You Buy or Build Your Home?

Whether you’re a first time home buyer or a seasoned veteran, there’s something about the process that inspires buyers to hunt high and low for the home of their dreams.


But which path will take you there — buying an existing home or custom building a home from the ground up? Let’s look at the advantages and disadvantages of both to help you evaluate which is right for you.

Pros of buying an existing home


Buying an existing home is the quickest way to become a homeowner. For buyers working with a fixed timeline due a job transfer, for example, or the beginning of the school year, it’s the easiest way to ensure the process is completed in the shortest amount of time.

Better Bargaining Power

You have more negotiating power when purchasing an existing home. An experienced real estate agent, whether full-price or low-commission, can guide you through the process of leveraging market conditions, comparables, and advise on the best time to buy, depending on whether your area is experiencing a buyer’s or seller’s market.


How long the home has been on the market, its condition and the seller’s level of motivation are all factors to consider.

Established Communities

Another good reason to buy an existing home is if you have your heart set on living in a particular neighborhood or community. In an older, well-established community, you’re more likely to find a home that will suit your needs than you are to find an open lot or land to build on located close to schools, town, transportation and other amenities. Older homes in established communities typically have mature landscaping, which means you’re not paying thousands for new trees, shrubs and other plantings and waiting several years for them to grow in.


Choosing an older community also gives you a more accurate picture of your potential property’s value, as you have access to the home’s sale and tax history and comparable sales in the area.


In most cases, it’s cheaper to buy an existing home than it is to build. According to the National Association of Realtors (NAR) the median home price in April 2021 was $342,600 for all types of existing homes (single-family, condos, townhomes).


Comparatively, the median price of new construction during that same time was $372,400, not including the cost of the land itself, which averaged about $90,000 for a finished lot in 2019. Although it’s possible to keep costs to a minimum when building a new home by forgoing customized plans or upgrades, purchasing an existing home, in most cases, is typically the more economic option.


Using a mortgage calculator will help you get a handle on the total cost of purchasing an existing home based on the current interest rates, and you’ll be able to dive into your home search knowing just how much home you can afford.

Cons of buying an existing home


Flexibility is key here, as it’s rare a homeowner gets everything on their wish list when buying an existing home. You might need to factor in updates or renovation in order to custom fit a home to your needs.

Maintenance and repair

Older homes might come with older HVAC, plumbing or electrical systems, aging roofs or outdated appliances. Make sure you know how much existing wear and tear exists on the home you’re considering, and be prepared to upgrade accordingly.

Market fluctuations

Depending on the state of the market you’re in, your negotiating power may be limited. In a hot or seller’s market, multiple offers or limited housing stock could drive up prices and leave you with less leeway for leverage.

Pros of building a home


Of course, the ultimate advantage to building a home is your ability to customize the design to your exact specifications to suit your taste and needs. From the materials and layout to the fine details such as flooring and paint, every detail is chosen by you.


Building a home is also an opportunity to create a living space that is actually better for your health and the environment. Older homes may have issues with asbestos, lead paint, mold, leaky roofs or foundations or outdated energy-guzzling appliances.  A new build allows you to incorporate energy-efficient materials and HVAC systems, solar panels, or eco-friendly appliances. Your maintenance costs will be lower as well since your home’s mechanical systems are brand new. New homes are sometimes covered by a homeowner’s warranty as well.

Better resale value

Historically, home buyers look for newer construction, and homes with modern layouts, upgraded appliances, energy-efficient systems and robust Wi-Fi have a stronger resale value than vintage properties.

Limited competition

Building your own home allows you to avoid competing with other buyers, particularly an advantage if you’re looking to buy in an “always hot” or highly-sought after area.

Cons of building a home

Less opportunity to negotiate

A buyer has room to negotiate in the resale market, based on any number of conditions. When building a house, there’s less leeway for negotiating closing or building costs with a contractor.

Bigger time investment

The timeline for building a home usually includes finding the land to build on, an architect, contractor, and the process of actually building the home, which averages about seven months. 


If the land is not part of an existing neighborhood, you may need to work with the municipality to make sure you’re connected to water, sewer or the necessary permits. Buying into a development may eliminate some of that process but could limit your choice of home design. For some, moving into a neighborhood with a still-developing infrastructure is a drawback.

Decisions, decisions

When building a home, you make every decision, big and small, which some people find overwhelming.  Have your plans in place, your permits pulled and as many decisions possible already made before anyone swings a hammer, from your countertops to your flooring, to the lighting plan and where the windows are going. This is where home building can run off track, as changing your mind or being indecisive in the middle of construction can exponentially add time and money to your project.

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