Building vs. Buying A Home

The options for homeownership may be more complicated than you think. Make sure you make the right choice.

the two became anxious — the lease on their townhouse was due to expire and their home was not yet complete.

Customization. The ability to create a customized home has proven to have formidable appeal. It’s infinitely easier to have a house meet your exacting specifications if you build it from the ground up. But you have to account for costs as well. You may be able to fine-tune an existing home for less than the price of building.

Character and landscaping. Despite the advantages of customization, new homes will never be able to duplicate the character of existing homes. In addition to having unique architectural details, older structures are often constructed better and possess higher quality features such as solid doors and cinderblock foundations, Stevens says. Mature landscaping is also a bonus; buyers will not have to wait 20 years for their trees to grow large enough to provide shade and privacy.

\Amenities. Pre-existing homes have the benefits of established neighborhoods, including schools, shopping, and entertainment — all within reach. In the beginning phases of subdivision construction, burgeoning neighborhoods may have resources that are limited or inconveniently located.

For Joyce McGhee, buying an existing home was the best option. McGhee, an elementary school teacher, purchased her second home last June for $148,000, with 100% financing at a 7.3% fixed rate for 30 years.

McGhee, 48, who moved to Georgia in 2005 for a change in climate, decided to invest in homeownership again after a year of renting. The 23-year-old, three-bedroom home with hardwood floors and spacious rooms was exactly what she wanted. “I
was lucky, I found the one that was up to my satisfaction,” says McGhee.

Location was one of the deciding factors for McGhee, who wanted a home close to work but without the noise and congestion of city life that she had experienced in Boston. Her new neighborhood has the convenience of a suburb but the atmosphere of the country, and gives McGhee exactly what she desires: peace.

The major impediment during McGhee’s home search was that many of the houses were in need of renovation. “Practically every home shown to me wasn’t in move-in condition,” she says. “They needed repairs, and I would have had to do some upgrades.”

Still, McGhee wasn’t interested in a new home because they don’t have the “wisdom” of age, and an owner would have to wait for the foundation to settle and cracks to appear to know if there were problems. “At least with it being established, I knew it wouldn’t fall apart in 10 to 15 years,” says McGhee, who is thrilled with the quality of her home. “Older homes are better to me in the long run. They are sturdier, well-built.”

Whichever option you decide, make sure you understand what you are getting into. Know your budget and the difference between necessities and wants, and rank items in the order of importance to get the most out of your budget. To protect your investment, insurance is absolutely necessary and, in many cases, required by the mortgage lender.

Then there’s

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