Building a Home vs. Buying: Which Is Better for You?
You have different options available when you are ready to invest in home ownership. You could buy a market listed home, buy a newly constructed home, or build your own home with help from our home builders in Calgary and Airdrie. It is worth your time to review the buying processes for each one and weigh the pros and cons. You need to remember you want to find a home that fits your needs and budget since this is a major investment.
The Process of Buying a Market Listed Home
Market listed homes are those that are already owned by someone else. They can include single-family detached homes, semi-detached homes, townhomes, and condos. The general process of buying one of these homes includes:
- Choosing your own real estate agent. The seller will have their own realtor, who acts in their best interests to sell the home. You, too, should have your own agent, as it makes finding homes within your budget easier.
- Choosing a real estate lawyer. You will need a lawyer once you are ready to write a proposal for a sales agreement and during closing. It makes sense to find a lawyer when you start the home-buying process instead of waiting until later.
- Research different neighbourhoods. You will want to spend time finding out more about the neighbourhoods where you want to live. Is it near public transit, shopping, parks, and other amenities you use? Is it growing or is it in decline? What is the crime rate in the area?
- Get pre-approved for a mortgage. Being pre-approved gives you an idea of how much a lender is willing to borrow towards the purchase price of a home. This allows you to determine how much of a down payment you will need. In addition, it will save you time by viewing homes within your budget.
- View homes and find the one you want to buy. You may have to view numerous homes before you fall in love with the right one. Once you do, you will submit a proposal for the sale agreement. If the seller accepts it, then you move on to the closing processes.
- Finalize financing and close on the home. You will need to finalize the financing of the home and complete closing processes before you can take possession and move in.
The Process of Buying a New Home
A new home is one that was recently built, like some of our houses for sale in Calgary NW, Calgary NE, and Airdrie. Everything in the home is brand new, from the flooring to the light fixtures and appliances. Buying one of these homes would use the same processes as you would for a market-listed home.
The only difference is you would view homes in the neighbourhoods where the builder has built homes. For instance, at Genesis Builders Groups, we have communities in Airdrie, Calgary NW, and Calgary NE where you can view available new homes for sale. Our selections also include detached, semi-detached, and townhomes.
The Process of Building a New Home
Building a new home is a completely different process from the other two home-buying methods, but does include some identical steps.
- Research neighbourhoods where you can build a home. The first step is to do research about the new communities in Calgary and Airdrie being developed where you can build homes. You need to make certain you want to live in the community where you intend to build the home.
- View model homes in the community you select. Home builders will often have different model homes you can view to get an idea of the layout, size of rooms, and optional upgrades. Take the time to view these to decide which styles and designs of homes you may want to build.
- Obtain floorplans for homes you are evaluating. The builder will be happy to supply you with floorplans for the different homes you are considering building. Use the floor plans to start to think how you would arrange your furniture and other items in the home. This can help you determine which floor plan will be best for your needs.
- Request a list of standard features and optional upgrades. You will also want to find out what features are included in the base sales prices of the home. Ask if you can customize any of the standard features, like changing the colour the walls are painted. Find out what optional upgrades are available and request prices so you can decide if you want to upgrade any or keep the standard features.
- Choose a lot and floor plan. You will need to choose an available lot within the community to determine if the floor plan you select will fit correctly. Sometimes there are different sized lots, so only certain house designs will fit.
- Find a real estate lawyer. You will also need a lawyer to assist at various stages and review sales agreements, contracts, and closing processes. You can find one yourself, or we would be happy to provide you a list of referrals.
- Finalize the sales agreement and building contracts. You will need a sales agreement in place prior to the start of any work. This agreement may also be required when you apply for financing to build the home.
- Obtain financing to build the home. There are different types of financing available for building a home. The most common type of loan people obtain is a new construction loan. With this loan, the lender borrows you the money to build the home on a short-term basis—normally less than a year. They will release funds at certain points as the home is built. Typically, there are four different times this will occur, with a percentage of funds made available to the builder.
- Schedule the pre-possession walk-through and inspection. Near the end of construction, once the home is completed, you will do a walk-through to ensure everything is in order. You will be given a checklist of things you will also need to do to close on the home and take possession. This step normally occurs between 30 and 45 days before the home closing date.
- Convert your new home construction loan into a conventional mortgage. At some point, either at closing or just before, you will need to convert your current construction loan into a mortgage. Your current lender may be able to do this for you or your builder may be able to refer you to lenders that handle the conversion.
- Close on the home and take possession. Now that the home is built, you have inspected it, and everything is in order with your financing, you close on your brand new home and get the keys at closing.
Timing Considerations to Building or Buying an Existing Home
Time is a major consideration you need to weigh. Do you want to move into a home quickly or can you wait for several months while your home is built by our home builders in Calgary and Airdrie? If you cannot wait, but still want a brand new home, then you would be better buying a newly constructed home in one of our communities.
On the other hand, if you can wait while your customized home is built, which can take between three and six months, then you will have more flexibility in choosing design elements and whether you want standard or optional upgrades.
Cons of Building vs. Buying
- Optional upgrades can increase the building costs/purchase price of the home.
- New communities can still be in development, so you may not have many neighbours right away.
- If you like to do your own customizations, renovations, and upgrades, building a home may not be the best fit.
- You may have a short drive to get to shopping and retail stores until the area is fully developed.
- The community amenities may not all be available until the neighbourhood is almost completed.
- Lot sizes can be smaller than older communities, so, if you desire a home with big front and back yards, building a home may not be best.
Pros of Building vs. Buying
- Everything is brand new, including that new-home smell!
- New homes will require less maintenance since everything is new.
- New homes follow the most current building codes and requirements.
- New homes are built using energy-efficient materials to help reduce energy costs.
- The latest technologies can be incorporated into the design, like wiring for the internet, security systems, cable, and entire home sound systems.
- New home designs feature many of the latest design trends, like open kitchens, big master bathrooms, and walk-in closets.
Even though building a home might seem like the best option, it is not always the right choice for everyone. You need to take into account your budget, lifestyle factors, and time considerations. Just remember, you are not simply building or buying a home; you are making a major investment in a home and neighbourhood where you will want to live for years.
For assistance in picking a neighbourhood to live in Calgary or Airdrie, to check out our recently built houses for sale in Calgary NW, Calgary NE, or Airdrie, or to learn more about the home buying process, please feel free to contact Genesis Builders Group at (403) 265-8079 today!