10 Pros and Cons of Building a Home

pros and cons of new construction



It is said that one of the top 5 most stressful life events a person can endure is purchasing their home.  Considering that a home is, most likely, the single most expensive purchase a person will make in their lifetime, and that they will probably be taking out a 30-year loan to complete the transaction, its no wonder why the entire ordeal can cause so much stress.  When hundreds of thousands of dollars are on the line, people tend to overthink each decision, and second-guess themselves many times over.  Then, when one adds in the sheer amount of choices there are in any given marketplace, the entire idea can easily become very overwhelming.


Choices need to be made in regards to size, price point, location, and new vs existing.  The case can be made equally for building new vs buying existing, but at the end of the day, only one of those options is the right choice for you.  You could even further narrow the scope by deciding if you should build with a production builder, customer builder, or self manage the project on your own land!  For our purposes today, we are going to assume you’re thinking of a production builder!  By weighing the pros and cons of building new carefully, you’ll be much more prepared to make the right decision when the time comes.


new build pros and consPro: The New Factor


Everyone knows the smell of a new car, but there is also a “new home smell” that is equally as alluring. New homes smell clean, crisp, and a little like fresh paint.  They definitely do not smell like the Jones listing down the road where you could tell they burned dinner last night, and the litter box was overdue for a cleaning.  The carpets have never been walked on by a stranger’s bare feet, there has never been a spill or leak left uncleaned, no one has clipped their toenails or shaved in your bathroom, you don’t have to worry about whether or not the previous owner was a smoker, and you will be the only one to have cooked dinner in that oven.  People can be gross and weird at home, and buying new assures that you get to be the first version of gross that home will ever encounter.


Con: Breaking the Home In


One thing that all new homes have in common is that they were built by human hands who are on a tight production schedule, and there is a large margin of human error as a result.  When the HVAC contractors are running behind, and have to install more units in a day than they have time for, you can guarantee they will get in a hurry and something careless will happen. Unfortunately, not all of these mistakes are necessarily discovered before you move in.  If the home is set for completion in July, but the heater was improperly installed, chances are you will not know anything is wrong with it until it fails to start up, or breaks down on the first cold day of the year.


Things can get even dicier if you choose to build a brand new floor-plan that has not been in the market place long, or the builder is opting for a brand new method of doing something and yours is one of the first homes to test it out.  Steep roof pitches have been known to leak in a rainstorm horribly if the flashing isn’t installed exactly right, but if its a new design, the only way to test out the flashing & installation is with a huge rainstorm. If it doesn’t rain until after closing day, you may find yourself ankle-deep in water weeks after moving in.


All of these kinks happened to each and every existing home on the market as well, but they happened years before you moved in.


Pro: Your Personal Selections


One of the best parts of buying a new home is that you get to go to the design center and pick out everything from the cabinets to the counters and flooring.  Before the design center appointment, you even get to pick out floor plan options, adding in a powder bath or media room.  In theory, you can do this on an existing home as well, but you have to have a lot more cash on hand to completely remodel an existing home after closing.  Most of the time, your selections at the design center will cost you about 25-50% of the total amount in a cash deposit, and the remainder is rolled into your mortgage.  Buying new means you can go as traditional or as modern and on-trend as you want (or can afford) and it will all be installed, looking beautiful on the day you move in.


Of course, you can always buy an existing home and plan to take out that ugly granite that you don’t like, or the dated floors, down the line, but before you get to do that, you’ll probably also end up replacing the air conditioner, or water heater, pushing your home improvement project further behind.


Con: Your Personal Selections


But wait, didn’t you just say that’s a pro?  One of the easier parts of buying an existing home means that you get what you see, take it or leave it.  You may change the carpet out before moving in or repaint, but for the most part, the home is what it is.  Going to a builder’s design center means that you have to choose from literally hundreds of countertops, flooring options, carpet colors, and more. Not only can all of these choices completely overwhelm many buyers, but that 50% deposit can add up quickly.  If you make the mistake of pricing yourself out of your dream home, you’re then tasked with the job of making cuts to your selections.  Unfortunately, it’s not as simple as narrowing down a wardrobe in a department store.  By cutting one item out of the final selections, you can potentially open up pandora’s box!  For example, you decide to cut out the expensive backsplash, but now the more affordable option does not look nearly as good with this granite, so should you change the granite too? If you change the granite, that means the cabinets may no longer match!


It is a very rare buyer who opts to take every standard option on their new home without spending a dime or going over their initial budget.


Pro: No Competition or Bidding Wars


Unless you are attempting to purchase a new home in a brand new neighborhood that is in extremely high demand, or on a very unique lot the chances are that you are not going to be competing with very many people.  Despite how the onsite salesperson may try to spin things, there are just not that many unique qualities that would distinguish one interior lot from another, so if someone actually does purchase your first choice out from under you, there will always be other lots almost exactly like it that you can select for your home.  Buying new construction means that you can actually take the night, or the weekend to sleep on your decision, without worrying about needing to jump in before someone else does.


When the market is hot, well kept, nicely staged existing homes will become a battleground for bidders, often going for well above market value.  Home buyers will find themselves offering excessive amounts of cash to pay the difference when the home does not appraise, waiving their right to typical repairs, and more just to “win.” Unfortunately, many fail to realize that “winning” a bidding war means that you have now gone into this investment underwater, and could easily wind up in real trouble if the market ticks down again.


Con: Proximity & Commute


In most areas of the country, affordable new construction has been pushed out past the main city or metro area limits. As areas grow, they have to grow out, meaning that most new home communities are going to require a hefty commute for those who work in the city.  This also means that newer areas can be lacking in infrastructure, restaurants, retail, and entertainment. Local school districts may be just starting out and are not up to the same standards and ratings as those in more established areas.


Growth in rural areas also can mean that the new construction communities fall in special tax districts to cover the cost of bringing in utilities, or emergency personnel.  These tax districts can mean thousands of dollars additional per year for a new homeowner, sometimes pushing them out of being able to afford that dream home.


Buying an existing home allows you more choice over your location, a shorter commute, or easier access to the parts of town that make your chosen metro area special and unique in the first place.


Pro: Community Amenities


Developers know that it can be an uphill battle to get prospective buyers to take that leap and drive 30 extra minutes out of town for their new home, and many times make up for it in community amenities.  Master-planned communities no longer get away with just having a few parks.  Many now come equipped with pools, clubhouses, lifestyle directors who plan monthly events, community common areas, shops, and even gardens.  Buying in a new home community means that you are buying into a complete lifestyle of meeting neighbors at the fishing pond, walking your dog on the beautifully landscaped trails, and enjoying movies & food tucks at the green space.  Developers have armed their builders with beautiful visions of children at play, and buyers are there for it!


Con: Not All Builders Are Created Equal


Builders come in all shapes and sizes, and some are better at offering service & amenities, while others are better at offering a cheaper price.  Just like in the auto industry, a home is not merely “sticks and bricks” but rather a complex system of engineered choices.  Lumber packages that builders choose from come in economy and premium options, warranties can be all-inclusive or limited, brands they choose to incorporate vary in performance ratings, and then there is the builder’s reputation. Simply walking into a builder’s model home is as deceiving as only checking out the cars on the showroom floor.  The models are pristine, decked out with every upgrade available in an effort to “show all the options.”  A buyer must be extremely educated, and really research builders in the market to know if they are making the right choice.


new construction home prosPro: Energy Efficiency


Every new home on the market is being constructed with some degree of energy efficiency in mind.  Whether consumer demand is setting the standard, or local building codes are dictating certain changes, every home constructed today will be more energy-efficient than the exact same sized home build 10-20 years ago.  New energy options and standards include efficient HVAC systems, Low-E windows, better-rated insulation, low flow plumbing, Energy Star appliances, radiant barrier roofing, and tank-less hot water heaters.  Depending on how many options a builder has worked into their standard package, you could potentially save hundreds of dollars each month on your utility bills over an existing home.

Con: Delays Cost Time & Money


If you start asking around, you’ll be hard-pressed to find anyone who purchased a new home and moved in on their original projected closing date.  In fact, these days many builders won’t even give a buyer a ballpark estimate until they have passed certain milestones in an effort to avoid potential conflicts or cancellations. Delays in construction are inevitable. Mother Nature is known to bring in an extra rainy season, more snow than usual in the winter, or even excessive heat waves in the summer, all of which can cause delays.  A foundation cannot pour in the rain, or when it is too cold.  A roofer cannot work if the heatwave is dangerous.  A hurricane in a totally different part of the country can mean a complete shut down of lumber or brick production. Relief efforts can then send workers away, in pursuit of higher wages and more guaranteed income.


Whatever the reason for the delay, it will cost you both time and money.  The longer the delay, the more expensive it can become.  If your lease runs out before construction completes, you may find yourself having to sign on for a month-to-month lease, costing nearly double in rent. In some unfortunate situations, a delay could mean the loss of a really great interest rate, increasing your monthly payment for the entirety of your loan.  Occasionally, a sympathetic builder may offer a concession for an excessive delay, but at the end of the day, the contract the builder has everyone sign releases them of any accountability for any delays.

Ready to make your decision?


Once you have carefully weighed all of the pros and cons, your decision should be clearly visible.  If time is not of the essence, and picking your dream kitchen is your highest priority, then building is going to be the way to go every time.  However, if a baby is due in three months, and the thought of mom or dad needing to commute 30 extra minutes while dealing with sleepless nights seems like a reach, purchasing an existing home is probably your better route.


Whatever your decision, an experienced Realtor should always be the next step to help you move forward!



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Junell DuBois

Junell DuBois is a DFW based lifestyle blogger who spent almost 15 years selling new homes in the area. She worked for several top area builders during her career and became an expert in new home trends and energy efficiency. Junell sold homes in communities from Castle Hills to Ft Worth, and Aubrey to Burleson and everywhere in between. She recently stepped away from the model homes to concentrate full time on writing, but is excited for opportunities to contribute to Real Estate blogs to keep up with the industry!

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